South Korea May Allow Freezes on Suspect Crypto Accounts

Crypto News Regulation

South Korea's FSC May Allow Instant Freezes on Suspect Crypto Accounts

Written by Aaron S.,

Editor-In-Chief

Last Updated: January 06, 2026

Key Takeaways

South Korea’s FSC may soon allow immediate freezing of crypto accounts suspected of manipulation to prevent illicit fund transfers;
The proposed rule mirrors stock market safeguards, enabling authorities to block profits before they are transferred to private wallets;
Regulators aim to close enforcement gaps caused by slow legal processes, following 2025 updates to the Capital Markets Act.

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South Korea's FSC May Allow Instant Freezes on Suspect Crypto Accounts

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South Korea's financial watchdog is reviewing a proposal to allow authorities to freeze cryptocurrency accounts immediately when manipulation is suspected.

The Financial Services Commission (FSC) is working on this after a Newsis report found that criminals could move gains before the current court processes stop transfers.

This initiative would mirror a process that the country's stock regulators use to block access to accounts and prevent profits from being withdrawn after illegal actions.

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According to officials, front-running, automated wash trades, or early bulk purchases often lead to profits that can vanish within a short window if not frozen quickly.

The FSC hopes new measures will let agencies step in before unjust gains are withdrawn. These preventive tools are expected to help financial enforcement teams manage incidents that slip through oversight due to slow current procedures.

Updated rules under the Capital Markets Act took effect in April 2025, which gave regulators the power to restrict accounts linked to unfair trading or illegal short selling. In November 2025, officials began discussing whether crypto markets should be subject to the same requirements.

Regulators have highlighted that, with digital currencies, money can be quickly sent outside exchanges to personal wallets.

Recently, Kim Byung-kee, a figure in South Korea’s Democratic Party, was under scrutiny about his actions toward Bithumb $709.88M , a local cryptocurrency exchange. What happened? Read the full story.