South Korea Unveils 2026 Plan to Fight Crypto Market Manipulation Using AI

Highlights:

• South Korea’s FSS has announced plans to tighten oversight of crypto, AI, and IT technologies in 2026.
• The regulatory body is adopting AI tools to strengthen its oversight across the different sectors. 
• There are also plans to conduct regular checks on activities that could negatively impact fair trading. 

South Korea’s Financial Supervisory Service (FSS) has rolled out new regulatory plans for 2026. According to a local news outlet, the FSS plans to strengthen oversight of the nation’s virtual asset market, reduce financial crime, and implement tighter controls on technology risks in the financial system. 

A key area of interest in the FSS’s new plan is closer monitoring of activities that influence fair trading in crypto markets. The regulatory body says it will carry out scheduled checks on areas it considers high risk. These include price manipulation through whale investors’ tactics and pumping asset prices by placing large buy orders at a fixed time. The FSS also flagged other threats, such as the inappropriate use of exchanges’ Application Programming Interfaces (APIs) to control trades, spreading fake news on social media to influence price movements, and placing fake deals to create false trading volume.

FSS to Adopt Special Technological Tools to Aid Oversight

To improve surveillance, the FSS plans to use tools that can quickly track unusual and unexplained price jumps. The regulatory agency is also planning to develop Artificial Intelligence (AI) tools that can read and sort text data. This will help in identifying suspicious market activity early.

The FSS has also set up a task force to prepare for the next phase of the country’s virtual asset law. The group will draft and publicize rules on new token launches and how exchanges decide which assets to list. They will also create review guides for companies that manage digital assets and those focused on issuing stablecoins. 

To help citizens make better-informed decisions and support fair competition, the FSS will enforce better trading fee management across exchanges. In addition, trading platforms in South Korea must always share timely and well-detailed trading information with the public.

South Korea’s Government and FSS Collaborate to Fight Financial Crimes

Aside from cryptocurrencies, the FSS is also stepping up its fight against financial crimes. This comes as the nation’s government moves to eliminate illegal lending operations and other similar practices. A joint working group of special judicial police will be deployed to respond faster to these financial crimes. 

The FSS is also working to reduce damage following voice phishing incidents. To achieve this, the regulatory body plans to link telecom and financial companies, then use AI tools to identify early signs of fraud. In addition, the Illegal Financial Damage Reporting Centre will be expanded to accommodate more victims and offer prompt assistance. For phone-related crimes, the FSS wants to develop a system that supports early police intervention. It is also working on rules that would mandate victims’ compensation.

Other sectors that are of significant interest to the FSS include technology safety, Information Technology (IT) systems, and AI. The agency plans to introduce stricter penalties for system failures and increase accountability for company leaders and security heads. Financial firms must keep full records of their IT systems and address serious user concerns without delay. 

Notably, a shared cyber threat system called FIRST will start operating within this month. It will help financial companies to share warnings and risk data. The agency is also planning on rolling out new guidelines for fair and responsible use of AI tools. There are also provisions for risk management models to help companies control risks at every stage of using AI.