The Financial Supervisory Service (FSS) of South Korea has announced significant upgrades to its artificial intelligence capabilities aimed at enhancing the surveillance of digital asset markets. This development reflects a decisive move towards automated enforcement in response to the increasing complexity of trading activities.
On Monday, the FSS revealed that it has improved its Virtual Assets Intelligence System for Trading Analysis, known as VISTA. The key addition is an automated detection algorithm capable of identifying potential price manipulation events without the need for manual analysis.
The newly implemented algorithm utilizes a sliding-window grid search technique to meticulously investigate every possible sub-period within a trading dataset. This systematic approach is designed to facilitate comprehensive analysis of potential manipulation windows that were previously identified manually by investigators.
According to the FSS, performance tests conducted on completed investigation cases demonstrated that the upgraded system successfully detected all previously identified instances of market manipulation. Furthermore, it flagged additional suspicious trading intervals that traditional analytical methods had failed to uncover.
Looking ahead, the FSS has allocated a budget of 170 million won (approximately $116,000) for 2026 to support the ongoing enhancement of AI functionalities. Future upgrades are set to introduce capabilities such as automatic identification of networks involved in coordinated trading, the analysis of irregular trading-related text across numerous crypto assets, and tracing the origins of funds implicated in manipulative activities.
This upgrade to the AI surveillance system aligns with the FSS”s broader strategy to bolster enforcement mechanisms within the cryptocurrency landscape. In a related development, local news source Newsis reported that the Financial Services Commission (FSC) is contemplating a transaction suspension system. This proposed system aims to preemptively block transactions, thereby hindering suspects from laundering illicitly obtained funds.
The push for enhanced crypto surveillance in South Korea coincides with a broader initiative to expand AI-based monitoring across the nation”s capital markets. On the same day as the FSS announcement, the FSC declared that the Korea Exchange would implement an AI-driven market monitoring system to improve the early detection of stock price manipulation.
