South Korea Plans Crypto Account Freezes After Two-Year Crackdown

South Korea’s Virtual Asset User Protection Act took effect on July 19, 2024, outlawing market manipulation, trading on undisclosed information and other abusive conduct while giving financial regulators investigative and sanctioning powers. The law marked Seoul’s first dedicated framework for protecting crypto investors and imposing order on a market where rapid, cross-exchange trading can complicate enforcement. Regulators are now using its two-year record to shape a second-stage Digital Asset Act with stronger tools.

The Financial Services Commission and Financial Supervisory Service said on July 20, 2026, that they had completed more than 40 investigations and referred or reported over 30 cases involving 25 suspects to investigative authorities. Average illicit gains were about 1.4 billion won per case. Authorities have added AI surveillance featuring second-by-second manipulation analysis and automatic detection of suspicious intervals, while considering payment freezes for implicated accounts and whistleblower rewards to prevent concealment of illegal proceeds and accelerate detection.