Anatomy of a Crypto Scam: S. Korea Exposes $4.85M ACE Token Fraud Tactics

South Korean authorities detailed two fraudulent trading tactics used in the price manipulation of the Fusionist (ACE) token, which resulted in investor losses totaling 7.1 billion won ($4.85 million).

Findings from a trial in Seoul specify how traders used artificial strategies to deceive the market.

Fake Volume Scheme Created Illusion of Demand

The first method involved artificially inflating trading volume. Manipulators strategically placed buy limit orders above the market price while simultaneously setting sell limit orders below it.

This created a false impression of high demand, leading traders to believe the token was experiencing organic growth. Reports indicate smart contracts automatically executed these orders, maintaining constant activity and masking the lack of genuine market interest.

High-Speed Spoofing Faked Buy Pressure

The second method involved creating fake buy pressure via spoofing. Manipulators placed buy orders at five price levels above the last traded price, designed to mimic real investor demand, only to automatically cancel them within three seconds.

Repeating this process continuously misled traders about sustained interest, artificially driving up the price.

Prosecutors Detail Manipulation Impact

On April 3, prosecutors reportedly exposed how defendants manipulated ACE token prices using “hit” orders (loss-making trades to inflate volume) and spoofing (repeatedly placing and canceling fake buy orders). These tactics caused a 15-fold surge in daily ACE volume on Bithumb, with “hit” orders accounting for nearly 89% of the activity.

Prosecutors noted the defendants also placed legitimate sell orders to liquidate coins entrusted to them, though these were not part of the manipulation charges.

Legal Fallout and Regulatory Implications

Authorities believe these manipulative strategies significantly contributed to investor losses, highlighting concerns over unregulated trading practices. The ongoing trial in Seoul will determine the legal consequences for those involved.

Regulators worldwide may view this case as a precedent for stricter crackdowns on fraudulent market manipulation tactics within the crypto industry.

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