South Korea's Financial Supervisory Service (FSS) has launched an urgent investigation into the ZKsync (ZK) token following an extreme price surge on the Upbit exchange on February 1, 2026. The token's price exploded by nearly 1,000% in just three hours, sparking immediate regulatory action over suspected market manipulation.
The incident began with ZK trading around 33 Korean won (KRW) before rapidly climbing to a peak of 350 KRW by 11:30 AM, coinciding with the start of a scheduled maintenance window on Upbit. By 6:30 PM, when maintenance concluded, the price had collapsed back to the 30 KRW range. Upbit dominated trading during the event, with its ZK volume spiking 4,200%, far exceeding the 180% and 150% increases seen on Binance and Coinbase, respectively.
Regulators suspect coordinated manipulation, with blockchain data revealing a clear pattern. Fifteen previously inactive wallets purchased over 4.2 million ZK tokens in the 30 minutes leading up to the maintenance. These same wallets then sold at the peak, realizing estimated profits of approximately $18.7 million. The FSS utilized its AI-powered VISTA surveillance system to flag these suspicious order clusters and abnormal trading patterns in real-time.
The probe is being conducted under South Korea's strict Virtual Asset User Protection Act, which came into effect in 2024. Legal experts, such as Jin Hyeon-su of Decent Law Firm, indicate the concentrated buy-and-sell pattern likely constitutes illegal price manipulation, collusive trading, and unfair trading. Penalties under the act can exceed one year in prison and fines of up to five times the illicit profits.
This case is part of a broader regulatory crackdown. Just days prior, on February 4, a Seoul court sentenced the CEO of a crypto management firm to three years in prison for manipulating token prices on the Bithumb exchange. The FSS has announced plans to expand its use of AI tools for real-time market surveillance, signaling a heightened enforcement stance against altcoin market misconduct.
