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- South Korean regulators are reviewing a sharp ZKsync price surge linked to exchange maintenance.
- Traders may face prison and heavy fines if manipulation is confirmed.
- Authorities plan tougher oversight using advanced monitoring tools.
According to the report, South Korean financial authorities have begun a probe into unusual trading activity linked to the ZKsync token, with attention also turning to activity on Upbit, the country’s largest crypto exchange. The move follows a sudden and extreme price spike that unfolded within hours on February 1.
Regulators believe the event may involve coordinated price manipulation. If proven, those responsible could face prison sentences under the current law. ZKsync traded near 0.023 dollars early Sunday morning, local time.
The market appeared calm ahead of scheduled system maintenance on the Upbit crypto exchange. Conditions changed quickly before the maintenance window began. At around 11:30 am, buying pressure surged. The token price jumped to nearly 0.24 dollars within a short span.
ZKsync Surge on Upbit Draws Regulatory Attention
The rise did not last. When the maintenance period ended later that day, the price returned to its earlier level. By 6:30 pm, ZKsync again traded near 0.023 dollars. The round-trip move wiped out most gains in hours. The sharp swing caught the attention of regulators and market observers. Trading data showed an unusual pattern. Buy orders clustered tightly before maintenance.
Selling followed soon after. Legal experts believe some traders built a large buy wall to create artificial demand. This activity likely pushed prices higher and attracted momentum buyers. Once maintenance locked trading access, the setup allowed for rapid price distortion.
Exchange data adds weight to regulatory concerns. On February 1, ZKsync trading volume on Upbit surged by more than 4,000 percent. Activity on Coinbase told a different story. There, volumes rose by about 150 percent. Prices climbed by less than 40 percent.
The contrast suggests the move centered on the South Korean market. Upbit now accounts for nearly 40 percent of all ZKsync trades. This share appears unusual given the token’s limited popularity in the country. At the time of review, ZKsync made up less than 2 percent of Upbit’s daily trading volume.
ZKsync Price Surge Triggers Manipulation Concerns
ZKsync itself remains a technical project. It operates as a layer two network on Ethereum. The system uses zero-knowledge proofs to bundle data and lower transaction costs. The technology did not release major news on the day of the surge.
If authorities confirm artificial price creation, the case may fall under the 2023 Act on the Protection of Virtual Asset Users. The law treats price manipulation as a criminal offense. Convicted traders may face more than one year in prison.
Courts may also impose fines up to five times the illegal profit. Additional penalties may apply if other investors suffered losses. The Financial Security Service has warned that a formal investigation may follow after a severe review.
The case fits into a broader national crackdown. South Korean courts have already issued jail terms in similar cases. Earlier this month, regulators also announced plans to deploy AI based tools to detect unfair crypto trading.
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