South Korea’s Financial Supervisory Service (FSS) has released its 2026 crypto oversight plan, focusing on stopping market manipulation, AI-based monitoring systems, and setting clearer exchange rules.
The regulator also plans stricter penalties for financial firms involved in serious IT system failures.
According to the February 9 work plan release, the Financial Supervisory Service will step up supervision of the crypto market by conducting more direct, faster investigations into suspicious trading behavior.
The regulator plans to focus on suspicious trading activity and possible market manipulation. This includes risky trading patterns, coordinated price moves, and organized schemes meant to mislead investors.
Authorities will closely watch large whale trades that suddenly move prices, bulk buying used to pump markets, and price changes that happen when deposits or withdrawals are paused on exchanges.
They will also monitor automated API trading and false rumors spread on social media. Eventually, officials believe these actions often happen together and can harm fair and transparent price movement.
All this strict action came after South Korea’s second-largest crypto exchange, Bithumb, mistakenly sent 620,000 bitcoins to 249 users during a promotion. Each user received coins worth about $166 million on average.
Some users sold the assets, causing a sudden price drop. The exchange later recovered most funds, retrieving 618,212 bitcoins and 93% of the sold amount.
After this incident, the Financial Supervisory Service confirmed it will investigate possible price manipulation in the crypto market this year.
As part of the upgrade, the FSS is rolling out AI tools that scan both trading activity and text signals. These systems can detect unusual price jumps within minutes and identify linked wallet groups acting together.
The same technology approach will also support early warning systems for fraud and voice phishing by combining telecom and financial data sources.
A dedicated task group has been created to prepare the framework for the upcoming Digital Asset Basic Act stage. The team will work on token issuance disclosures, trading transparency standards, and licensing guides for crypto operators and stablecoin providers.
Exchange fee reporting formats will also be standardized to help users compare real trading costs more easily.
Beyond crypto markets, the plan introduces stricter IT risk rules. Financial firms may face punitive fines for serious system failures, while executives and security officers will carry greater direct responsibility.
Regular vulnerability checks and mandatory security disclosures are also being pushed to reduce system-wide risk.
South Korea’s 2026 plan focuses on stopping crypto market manipulation, using AI to monitor suspicious trading, and setting clearer rules for exchanges to protect investors.
Regulators will directly investigate risky trading patterns, large “whale” trades, coordinated price moves, and social media rumors using new AI-based monitoring systems.
Financial firms may face heavy fines, executive accountability, and mandatory security audits for serious IT system failures.
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