20 publicly listed companies are currently investigated by South Korean financial authorities for unfairly utilizing virtual currency claims to boost their share prices. After seeing a surge in their share prices, virtual currency does not always follow through.
20 companies being investigated
Currently, 20 firms listed in the South Korea stock exchange market (Kosdaq) in connection to virtual currency are being investigated for unfair practices, according to a local media report.
The South Korea financial regulatory body has given a caution to investors stressing “that a number of unfair trade transactions were found in so-called ‘virtual currency-related stocks’ in the stock market” according to Yonhap.
The Korean Banker also detailed that “There has been a frenzy of virtual currency related stocks in the stock market…Many listed companies have announced related business plans such as [launching] virtual currency exchanges and so-called ‘virtual currency themes’. The share price of the virtual currency stock surged due to the announcement of the business plan.”
The establishment of crypto exchanges and the confirmations of initial coin offering (ICOs) is one of the schemes utilized.
Virtual currency related firms
Presently, the companies that have virtual currency connection in South Korea consist of Mgame, CTL Ic, Woori Technology Investment, SCI Credit Rating & Information, Hanbitsoft, Fourthlink, Makus, and Igis System explained Ddaily.
Despite that, the financial regulators did not state the names of the firms currently going under investigation. This is due to a market stabilization, stressing that the firm’s name will not be revealed because it would “directly affects the stock price” of each firm included as indicated by an FSS official.
Firms unfairly using virtual currencies to boost their shares will continue to be monitored and sanctioned, explained The FSS. The News outlet noted that in the near future, stricter controls would be taken against unfair trading in stock which will, in turn, prompt investigations on virtual currency-related stocks that are possible to be unfairly traded and leading to damage to a big group of investors, detailed the FSS.
Former Vice-Chairman of the FSS and Chairman of the Korea Deposit Insurance Corp Lee SEug- woo also elaborated that even though the amount of cryptocurrency related shares has presently rise promptly and it is challenging to call all of the crypto-currency related firms. This will further lead to an implementation of “a full-scale investigation into the presence of unfair exchange practices among the 20 related stocks surveyed and plan to increase the number of such surveys in the future.