South Korea Deploys AI to Catch Crypto Manipulators

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In a day when the city seems to hum with the whispered counsel of machines, South Korea contemplates a watchful eye cast upon the markets. An artificial intelligence, they say, shall observe the trades by the second and awaken only when deceit itself dares to breathe more loudly than reality.

  • Real-time detection of manipulation, with the second hand of the market as its metronome.
  • The Financial Supervisory Service, like a sober marquis of finance, targets whale schemes, pump-and-dumps, and the murmured misdirections of social networks with chillingly precise tools.
  • The Digital Asset Basic Act arrives with licensing rules for exchanges, operators, and stablecoin issuers, as if granting passports to the theatre where money performs on the stage of numbers.

South Korea plans to deploy artificial intelligence to monitor crypto manipulation across digital asset markets in 2026. This plan, announced in a modestly glowing annual work plan on February 9, has Yonhap whispering that the regulators will pursue schemes that threaten order and mislead the honest investor, who, like a shy country gentleman, longs for simplicity and truth.

Wu Blockchain, in its own parlour, shared the plan, quoting the regulator’s words, while giving the sense that the second phase of the virtual asset legislation is a curtain rising on a broader play.

AI Tools Target Crypto Manipulation Schemes

The FSS proposes to employ advanced detection systems to scrutinize high-risk manipulation: the so-called whale movements that sway prices with their heavy coffers, the “fence” that distorts prices when deposits dry up on an exchange, and the “racehorse” that gallops prices into a frenzy in a few breaths of minutes.

There will be second-by-second price surge analysis; AI will pore over the witticisms of the internet to detect misleading information. Abnormal trading groups will be flagged automatically, with attention to API-based orders and coordinated misinformation on social networks.

Regulators aim to detect the patterns that betray organized market abuse with a speed that makes a railway timetable look leisurely.

According to Yonhap, Korea’s FSS announced its 2026 plan on Feb 9: investigations into high-risk crypto manipulations (whale, containment/ramp schemes, API orders, SNS misinformation) with AI text/surge detection tools; new Digital Asset Basic Act group for phase-2 legislation…

– Wu Blockchain (@WuBlockchain)

Regulators Expand Laws to Curb Crypto Manipulation

The FSS has formed a task force to prepare the Digital Asset Basic Act, a small council with large ambitions. This move supports the second stage of South Korea’s virtual asset regulations. The group will draft disclosure standards for token issuance and trading support, and will prepare licensing and review manuals for digital asset operators. Stablecoin issuers will face clearer approval procedures, while the law promises stronger transparency across the industry.

Officials hope users will make informed choices based on reliable data, and they aim to foster healthy competition among market participants.

Exchange Oversight Strengthens Through Fee and Data Controls

Plans to refine how exchanges manage and disclose transaction fees. Differentiated fee structures should prevent unfair trading advantages, while disclosure rules will illuminate exchange operations. Enforcement against financial crimes will be strengthened, aligning with government priorities to curb harmful practices. A special judicial police consultative body will oversee financial crimes affecting the public.

Voice phishing prevention will rely on AI-driven early warnings; telecom and financial firms will share data in real time; victim counseling services will expand under a reorganized reporting center.

AI Systems Extend to Financial Crime and Cybersecurity

The plan addresses IT risks across the financial sector. Institutions causing major system failures may face punitive fines; CEOs and Chief Information Security Officers will bear greater security responsibility. Firms must disclose information security practices, and those who ignore vulnerabilities will be subject to inspections and audits. The Integrated Risk Management System will gather cyber threat data nationwide.

The FSS will publish Financial AI Ethics Guidelines and an AI Risk Management Framework to guide firms through AI deployment. The aim is to keep technology fair and accountable in finance, as if the market itself should wear a good conscience like a well-cut coat.

Yonhap notes that the strategy seeks to protect investors and strengthen market order, a desire shared by many who would rather spend their days in the quiet of a provincial library than in the glare of headlines.

Beyond this, the plan reveals a growing concern over manipulation in digital assets. South Korea’s regulators intend to roll out these measures gradually through 2026, a procession rather than a sprint.

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2026-02-09 17:06