South Korea’s financial regulator is moving deeper into automated oversight of digital asset markets, rolling out upgraded artificial intelligence tools designed to detect crypto price manipulation without human prompting.
The Financial Supervisory Service said it has enhanced its Virtual Assets Intelligence System for Trading Analysis, or VISTA, adding algorithms that can automatically flag suspicious trading patterns as market activity becomes faster and more complex.
From investigator-led reviews to automated detection
According to the regulator, the upgraded system now uses an automated detection model that scans trading data continuously, removing the need for investigators to manually define time windows when manipulation might have occurred.
The new approach relies on a sliding-window grid search technique, allowing the system to examine every possible sub-period within a dataset. The FSS said this enables a more exhaustive review of trading behavior than traditional, investigator-led analysis.
In internal performance tests using completed enforcement cases, the watchdog said the system successfully identified all manipulation periods previously uncovered by human analysts. It also flagged additional timeframes that had been difficult to detect using older methods.
More AI capabilities planned through 2026
The FSS said it has secured a 170 million won budget, about $116,000, for 2026 to further upgrade the system’s capabilities. Additional AI-driven tools are scheduled to be introduced in phases through the end of that year.
Planned features include automated identification of networks of coordinated trading accounts, large-scale analysis of abnormal trading-related text across thousands of digital assets, and tools to trace the source of funds used in suspected manipulation schemes.
Pre-emptive freezes under consideration
The surveillance upgrade comes as South Korean authorities explore more aggressive ways to limit illicit gains in crypto markets.
On Jan. 6, local outlet Newsis reported that the Financial Services Commission was reviewing a payment suspension mechanism that could block transactions before suspected manipulators have time to launder profits. The proposal remains under consideration and has not been formally adopted.
Part of a wider push across capital markets
Crypto is not the only focus of South Korea’s AI monitoring efforts. The government is also expanding automated surveillance across traditional financial markets.
On Monday, the FSC said the Korea Exchange will begin operating an AI-based market monitoring system aimed at detecting stock price manipulation at an earlier stage.
Together, the initiatives reflect a broader shift by regulators in South Korea toward data-driven enforcement, as both crypto and equity markets generate volumes of activity that are increasingly difficult to police with manual tools alone.
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