On February 9, South Korea’s Financial Supervisory Service (FSS) released its 2026 regulatory roadmap, outlining stricter oversight of the virtual asset market. The plan targets high-risk activities that disrupt market order, including:
- “Whale-style” price manipulation through aggressive market orders
- Layered or “cage” trading strategies
- “Horse-racing” style coordinated trading tactics
- API-driven automated order manipulation
- Spreading false information on social media to influence prices
Regulators plan to launch targeted investigations to curb emerging manipulation tactics and maintain market fairness.
AI-Based Monitoring System to Enable Real-Time Detection of Abnormal Trading
From a technical perspective, the FSS will develop AI-powered analytics tools to identify abnormal market activity. The system is expected to:
- Detect rapid price surges in seconds or minutes
- Automatically identify abnormal trading windows
- Analyze suspicious trading groups and coordinated behaviors
- Improve regulatory response speed and enforcement efficiency
This initiative signals a transition from manual review processes toward automated, data-driven, real-time supervision.
Enhanced Financial IT Security and Executive Accountability
To mitigate risks across exchanges and fintech platforms, the FSS plans to:
- Introduce punitive financial penalties
- Strengthen accountability for Chief Executive Officers (CEOs) and Chief Information Security Officers (CISOs)
- Establish an integrated cyber threat monitoring system
- Promote security incident information-sharing mechanisms
These measures aim to reduce cascading risks arising from technical failures, system vulnerabilities, and cyberattacks.
Advancing the Digital Asset Basic Act and Compliance Frameworks
On the legislative front, the FSS has formed a dedicated task force to prepare for implementation of the Digital Asset Basic Act. Key priorities include:
- Building a virtual asset disclosure framework
- Developing licensing and project review guidelines
- Supporting enforcement of secondary digital asset legislation
- Standardizing industry compliance frameworks
Regulators seek to provide clearer rules and more predictable regulatory expectations for market participants.
Compliance Trends and the Growing Importance of On-chain Monitoring
As regulations tighten, exchanges and project teams are placing greater emphasis on on-chain risk detection and compliance analytics. Industry participants increasingly deploy tools such as Trustformer KYT to identify abnormal fund flows, suspicious trading behaviors, and manipulation patterns, strengthening risk control capabilities.
Conclusion
Through a combination of AI technology deployment, legislative development, and cybersecurity governance, South Korea is advancing a more comprehensive virtual asset regulatory framework. Moving forward, real-time monitoring, market transparency, and strong compliance operations are likely to become key competitive factors for exchanges and crypto projects operating in Asian markets.