South Korea’s Financial Supervisory Service (FSS) has unveiled a new regulatory plan targeting cryptocurrency market manipulation. The initiative focuses on investigating known manipulation schemes and developing an advanced, AI-powered monitoring system to detect suspicious trading patterns in real time. The FSS also aims to strengthen enforcement against financial crimes and improve support for victims of scams.
South Korea’s Financial Supervisory Service (FSS) has announced a new plan aimed at restoring order in the cryptocurrency market. The plan focuses on regulating risks that disrupt trading and tightening oversight of financial institutions’ technological systems.
The report was released on February 9 as part of the FSS’s annual policy direction. Authorities plan a detailed investigation into existing manipulation methods within the crypto space. According to the FSS, past methods included the “big whale” system, where large capital amounts influence asset prices.
Another method is the “fence” method targeting assets with suspended deposits or withdrawals. The “racehorse” method involves spiking a token’s price through bulk purchases at a specific moment. Officials are also watching manipulation using market API orders and fraudulent schemes spreading false information on social media.
To address these, the FSS plans to develop systems that automatically detect suspicious trading patterns. These systems will analyze price movements on a second-by-second and minute-by-minute basis. The regulator also plans to introduce artificial intelligence-based text analysis tools.
These tools are expected to identify coordinated manipulation groups and strengthen real-time market monitoring. Another key focus is enhancing enforcement against financial crimes that harm the public. This aligns with President Lee Jae-myung’s emphasis on eradicating “cruel financial practices.”
The FSS plans to promote a special judicial police consultative body to help scam victims. This is intended to improve on-site response and investigative coordination. The Illegal Financial Transaction Reporting Center will be expanded to provide victim counseling.
For voice phishing cases, a cooperative system with police will allow immediate investigations after proof of loss is shown. Preparations will also be made for a damage compensation system.
