South Korean regulators are intensifying oversight of the cryptocurrency market, moving faster to detect suspicious activity. This follows an official review into volatile trading of the ZKsync token on Upbit. The Financial Supervisory Service has also upgraded its AI surveillance system and secured its first prison sentence under new investor protection laws.
South Korean regulators are stepping up oversight of the domestic cryptocurrency market. Their coordinated approach aims to detect suspicious trading activity amid renewed volatility.
The heightened scrutiny was highlighted after the Financial Supervisory Service said it was reviewing sharp price movements in the ZKsync token listed on Upbit. The review follows extreme volatility concentrated around a system maintenance window, according to reports.
The FSS said it was analyzing data and could escalate the review into a formal investigation. Officials described the case as indicative of how regulators now respond to sudden price swings more systematically.
On Monday, the FSS expanded its use of artificial intelligence to monitor digital asset trading. The upgraded system automatically detects potential crypto manipulation across different time frames for earlier intervention.
Regulators have also signaled a willingness to act faster on enforcement. They are weighing mechanisms to enable pre-emptive freezing of funds to prevent laundering from active investigations.
This surveillance push coincides with courts applying new criminal penalties. The Seoul Southern District Court reportedly handed down its first prison sentence under the Virtual Asset User Protection Act.
The court sentenced a crypto executive to three years in prison for price manipulation involving a token on Bithumb. It ruled that repeated deceptive buy orders constituted market manipulation.
