Crypto market surveillance in South Korea has now shifted to machines. The local Financial Supervisory Service (FSS) officially activated a real-time artificial intelligence system on August 20, 2026, to track price manipulation activities.
This move replaces trading data analysis, which was previously conducted by human investigators, with scanning algorithms. The new system combines generative artificial intelligence with machine learning to detect volume anomalies and price spikes on exchanges. These patterns are then matched against two manipulation tactics: the “racehorse” type, or temporary spikes, and the “cage” type, which typically appears when withdrawals or deposits are suspended.
How Machines Read Dark Conversations
If the algorithm detects suspicious movements, the generative engine immediately widens its search net. The system not only checks exchange announcements or public news, but also scans audio-video transcripts from YouTube, internet forum posts, and private messaging group chats. The objective is to search for indications of pump-and-dump schemes or front-running activities.
To detect coordinated trading tactics and wash trading, the FSS applies Benford’s Law to its analytical models. All of these findings are summarized into a standardized report containing price history, volume, market indicators, and external triggers. This report is then submitted to human investigators as a basis for law enforcement.
Closing the Loophole on Billions in Losses
This multi-layered surveillance is intentionally implemented to complement the Virtual Asset User Protection Act, which took effect on July 19, 2024. The new regulation mandates the separation of customer funds and promises harsh penalties for perpetrators of illegal transactions.
The FSS took tightening measures due to an accumulation of past cases. Over the past two years, the authority has examined more than 40 cases of unfair trading and forwarded 30 of them to investigative agencies. The average illegal profit from a single manipulation case reached 1.4 billion won, equivalent to Rp14.5 billion.
For market manipulators who are used to coordinating through closed forums, their room for maneuver is now shrinking. Crimes that once took investigators a long time to crack are now directly confronted by a machine capable of simultaneously linking exchange chart movements with group chat histories.
Reported from crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
