South Korea seeks power to freeze crypto accounts in price manipulation cases
South Korea’s financial authority is moving to strengthen its ability to intervene early in suspected cryptocurrency price manipulation cases by seeking explicit legal authority to freeze related accounts.
According to News1, the Financial Services Commission (FSC) plans to include the measure in the upcoming second phase of the country’s cryptocurrency legislation. Under the proposal, when financial accounts are suspected of being used to manipulate crypto prices, the FSC would be able to coordinate with financial institutions and cryptocurrency exchanges to freeze the funds.
Closing gaps in illicit fund recovery
The initiative is intended to address a long-standing enforcement challenge. Authorities have often struggled to recover illicit gains because funds can be moved elsewhere while investigations and court proceedings—often lasting up to three years—are still ongoing. By allowing accounts to be frozen before a formal investigation is launched, the proposal aims to close a critical gap in illicit fund recovery.
An official from the authority cited a recent precedent to illustrate the measure’s potential impact. In September, a government task force disrupted a stock price manipulation case involving roughly 100 billion won ($69 million), of which about 40 billion won was illicitly obtained. It marked the first time the government implemented an early account freeze, preventing additional funds from being transferred beyond its reach.
The official added that the same approach could be applied to cryptocurrency price manipulation cases when suspicious transactions are detected through Korean crypto exchanges. However, the measure would not be effective against activity conducted via overseas platforms.
The proposal comes as the government continues to refine the second phase of its crypto regulatory framework, which is expected to focus primarily on stablecoin regulations. While authorities had originally planned to submit the bill to the National Assembly by the end of last year, the timeline has been pushed to this year as financial and monetary regulators work through unresolved differences.
One point of contention lies between the Bank of Korea and the FSC. The central bank supports allowing only bank-majority consortia to issue stablecoins, while the FSC opposes setting a bank-ownership threshold, arguing for the inclusion of non-bank participants.
Alongside enforcement and regulatory reforms, the government is also signaling a broader push to expand investor access to digital assets.
A Jan. 9 document from the Ministry of Economy and Finance showed the government plans to permit trading in spot crypto ETFs to improve investor access under its 2026 economic plan.
Against this policy backdrop, traditional financial firms are pressing ahead with their own digital asset initiatives, seeking to position themselves within the evolving framework.
Life insurer explores blockchain collaborations
Kyobo Life Planet Life Insurance, a mobile-only subsidiary of Kyobo Life Insurance, has partnered with Singapore-headquartered crypto exchange Crypto.com. According to South Korean media outlet Financial News, under the agreement, eligible users will receive benefits on Crypto.com, while reward points earned through Kyobo Life Planet’s healthcare platform can be used within the exchange’s ecosystem.
The collaboration reflects broader efforts by the parent company to expand into digital assets. Last month, Kyobo Life Insurance joined Circle’s public testnet, Arc, to assess the technical feasibility of stablecoin-related infrastructure.
