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The South Korean National Assembly is preparing to launch an investigation into transactions involving the altcoin AVAIL on the Bithumb crypto exchange. This initiative comes amid growing suspicions of price manipulation associated with the token, specifically in July.
Investigation Initiated
According to reports from Bloomingbit and Hanguk Kyungjae, lawmaker Min Byeong-deok from the Democratic Party of Korea is set to present the case during a Political Affairs Committee audit on October 17. Min intends to shed light on the circumstances surrounding the pricing and listing of AVAIL.
Understanding ‘Burger Coins’
Min Byeong-deok coined the term “burger coin,” which is used to describe altcoins issued overseas but traded on domestic exchanges. This is a play on the already established term “kimchi coin,” which typically refers to low-cap cryptocurrencies primarily found within South Korea.
During last year’s audit, Min focused on similar concerns related to the SUI coin, highlighting ongoing issues within the altcoin market. He stated, “The audit on October 17 will allow us to investigate the recent controversies surrounding AVAIL’s price and assess whether price manipulation has occurred on Bithumb.”
Price Fluctuations and Investigations
The South Korean Financial Supervisory Service (FSS) has also initiated its investigation following a surge of suspicious transactions related to AVAIL in late July. The FSS suspects that an unnamed investor purchased a significant quantity of AVAIL from foreign sellers and manipulated trading activities on Bithumb on July 23. These actions reportedly inflated the price from approximately $0.17 to $2.56 within a mere 15 minutes, although this was a localized phenomenon, as prices on other exchanges remained stable.
Calls for Transparency
Lawmaker Min has formally requested the financial regulators to supply relevant data for the forthcoming audit. This information will focus on the status of unusual transactions connected to AVAIL listed on Bithumb. Interestingly, many believe that the unnamed investor may have been acting on behalf of non-Korean individuals unable to access domestic cryptocurrency platforms.
Min’s office expressed concern, stating, “The price manipulation issues connected to the Bithumb-AVAIL incident are a shared responsibility between exchanges and financial authorities. Their neglect of investor protection is unacceptable, and we will hold them accountable.” He has previously criticized exchanges for overlooking investor harms stemming from these manipulative practices.
Ongoing Regulatory Scrutiny
The FSS’s investigation remains active, with authorities noting that any discussions about the investigation’s progress could influence market dynamics. As such, the agency has refrained from disclosing specific information until the inquiries are conclusively resolved.
Bithumb’s Position and New Regulations
Bithumb has opted not to comment publicly on the ongoing investigation, stating, “We have a monitoring system in place to report abnormal transactions to financial authorities, as mandated by the Virtual Asset User Protection Act.” This legislation, which came into effect in July, aims to enhance investor safety and combat price manipulation within the crypto market.
An unnamed insider from the crypto industry commented that this case will likely serve as an important precedent for both financial and investigative authorities, regardless of its final outcome.
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