Kangjin Supervisory Institute: Increasing market manipulation behaviors using APIs to manipulate cryptocurrency trading volumes, a special investigation will be launched

ME News Report, April 13 (UTC+8), the Financial Supervisory Service (FSS) of South Korea publicly disclosed typical unfair trading methods involving price manipulation through API automated order placement in the cryptocurrency market, and announced that it will promptly launch special investigations into accounts found to be excessively abnormal in order placement. The FSS stated that API trading currently accounts for more than 30% of the total buy and sell volume in South Korea’s cryptocurrency market. The FSS revealed four main manipulation techniques: first, repeatedly executing small market orders via API to create a false impression of trading activity, while manually placing high-priced limit orders to push up the price, then selling for profit after retail investors follow; second, pre-placing sell orders above the holding price, then continuously placing high-priced limit buy orders via API to raise the price to a target level before cashing out; third, repeatedly placing and withdrawing orders to create fake buy orders; fourth, using multiple accounts to wash trade and distort the market. The FSS warned investors that the periods around price resets on each exchange are often times of concentrated high-frequency API trading, and should be alert to sudden price surges during these times; it also warned that if API keys are leaked, the holder may unknowingly be considered an accomplice in illegal activities such as money laundering. (Source: Foresight News)