South Korea’s financial regulator announced plans to intensify scrutiny of cryptocurrency market manipulation starting in 2026. The Financial Supervisory Service (FSS) will target high-risk trading tactics including “whale” activity and schemes that exploit exchange disruptions. The agency aims to strengthen automated detection systems to analyze abnormal price movements and identify coordinated misinformation campaigns.
South Korea’s Financial Supervisory Service (FSS) said it will step up scrutiny of suspected cryptocurrency price manipulation in 2026. Governor Lee Chang-jin stated the agency will target high-risk trading practices that undermine market order, including coordinated manipulation and schemes exploiting exchange infrastructure disruptions.
The planned probes will focus on large-scale trading by whales and artificial price swings during exchange deposit or withdrawal suspensions. The regulator also intends to investigate coordinated trading mechanisms using APIs or social media to spread false information.
The FSS said it will strengthen automated detection by analyzing abnormal price movements at very short intervals. This includes developing tools to flag suspected manipulation “sections” and related account groups, alongside text analysis to identify coordinated misinformation.
On Feb. 2, the FSS expanded its use of artificial intelligence-powered surveillance tools to monitor crypto markets. This move reduces reliance on manual identification of potential manipulation within the trading environment.
A recent incident added urgency to the oversight push after crypto exchange Bithumb said it recovered 99.7% of excess Bitcoin mistakenly credited to users during a promotional error. According to the Asia Business Daily, the Financial Services Commission (FSC) subsequently held an emergency inspection meeting with the FSS and the Korea Financial Intelligence Unit (KoFIU).
Officials reportedly ordered a comprehensive review of internal controls across all domestic crypto exchanges. On Feb. 3, the FSS also said it was reviewing sharp price movements in the ZKsync token during a system maintenance window on Upbit.
The regulator stated it was analyzing the data and could escalate the review into a formal investigation depending on the findings. Upbit operator Dunamu previously stated it has internal systems that flag suspicious activities and a process for cooperating with regulators.
A spokesperson told Cointelegraph, “When regulators request information, we can provide the relevant trading data without delay.” In parallel, the watchdog established a task force to prepare for the introduction of the Digital Asset Basic Act. This unit will support implementation planning on disclosures, exchange oversight, and licensing standards.
