South Korea’s FSS to Deploy AI Monitoring by 2026, Targeting Market Abuse Following Bithumb Exchange Incident
South Korea's Financial Supervisory Service (FSS) has unveiled a comprehensive crypto oversight plan set for 2026, aimed at curbing market manipulation and enhancing transparency. The regulator will deploy AI-based monitoring systems to detect suspicious trading patterns, including whale movements, coordinated price pumps, and API-driven manipulation. Stricter penalties for financial firms with IT failures underscore the heightened scrutiny.
The crackdown follows Bithumb's erroneous transfer of 620,000 BTC during a promotional event—a blunder that exposed systemic vulnerabilities. Authorities now prioritize real-time investigations into social media rumors and exchange anomalies, particularly during deposit/withdrawal halts. The framework signals South Korea's push to align crypto markets with traditional financial oversight.
