Are crypto trading bots legal? Korea's first ruling under its crypto user protection act gave 3 years for how one bot was used

2026-10-20

On an exchange app, the current price of an unfamiliar coin flashes red. New fills scroll up several lines a second. It looks like a crowd has piled in.

In a case Korea's Financial Services Commission referred to prosecutors in November 2025, a trading bot made that screen (Korea Economic Daily). So are crypto trading bots legal? The ruling and the referrals show that what was punished was the way the bot was used.

1.What the law targets

Virtual Asset User Protection Act: Korean law, in force July 19, 2024, banning crypto price manipulation.

Exchanges officially open APIs for automated orders. They are a channel for buying and selling with your own money in your own account by rules you set. The call limits and minimum order size of the Upbit Open API are in the crypto trading bot build post.

The cases that ended up in court used the same channel to inflate volume or to move prices with orders never meant to fill.

2.The first ruling: 160,000 coins one day, 2.45 million the next

On February 4, 2026, criminal division 14 of the Seoul Southern District Court sentenced the head of a crypto fund operator to three years in prison and a 500 million won fine. Forfeiture was set at 846.56 million won, and a co-defendant received two years, suspended for three (TWIG24).

From July to October 2024, he used a trading bot to inflate volume and place fake orders. On July 21, the day before it started, the coin's daily average volume was about 160,000 coins.

Fake order: an order placed with no intention of filling and pulled soon after, to make the order book look crowded.

The next day volume jumped to 2.45 million coins, and 89% of it was his own trading. That is roughly fifteen times in a single day.

The busy trading on screen was mostly orders one person placed through a program. Someone following the volume had no way to know whose numbers they were.

The court found that the conduct obstructed fair price formation based on supply and demand and seriously damaged trust in the market.

The prosecution's claim of about 7.1 billion won in unjust gains, however, was acquitted for lack of proof. The punishment fell on the conduct itself, separate from the size of the profit.

The case went through the fast track in which the Financial Supervisory Service catches abnormal trading and hands it quickly to prosecutors. The report says it was the first such referral since the law took effect. The trading in question began on July 22, three days after the law came into force.

3.The two cases the FSC referred

On November 5, 2025, the Financial Services Commission referred two price manipulation cases to investigators.

In one, several people worked together. Through an API they placed market buy and sell orders several times a second for tens of minutes, making trading look active. They were exploiting the exchange screen on which the current price flashes red when it rises.

Meanwhile they added high bids to push the price up and quickly sold their holdings, making hundreds of millions of won.

In the other, one person repeatedly placed high bids worth hundreds of billions of won to drive the price up, with gains estimated at tens of billions of won.

The FSC noted that such conduct can bring fines of three to five times the gains or at least one year in prison.

4.Checking your own bot

Check that the bot is not set up to trade the same coin back and forth between your own accounts. Also check whether it keeps placing and cancelling orders it never means to fill.

To avoid being swept up by someone else's bot, remember the FSC's warning. A low-liquidity coin that surges for no particular reason, or whose price changes several times a second, carries a risk of a sudden crash, it said.

Hiddenpick is a Windows program that keeps on its server the betting rules that pick owners do not make public, and runs them as they are on the PC of the person who received them through a referral code. It currently runs on Evolution live baccarat at Stake (stake.com). How automated execution runs on live baccarat rather than crypto is in the baccarat bot guide. We are recruiting national pickster representatives, and those selected receive benefits worth $12,000, a one-year pass (apply at hiddenpick.my/pickster).