- South Korea’s FSS plans to investigate unfair trading linked to crypto token-issuing foundations.
- The regulator is expanding AI tools to detect suspicious crypto trades faster.
- No specific tokens have been named, and the impact on altcoins remains uncertain.
South Korea’s Financial Supervisory Service (FSS) plans to investigate suspected unfair trading involving crypto tokens linked to issuing foundations.
According to local news outlet Digital Asset, the regulator will focus on suspicious trading activities that could undermine market confidence, such as high-risk transactions associated with token-issuing foundations.
The FSS outlined its plans in a report on its work for the National Assembly Political Affairs Committee’s government audit on October 19. The regulator said it would respond more aggressively to activities that threaten market order.
FSS Uses AI to Detect Crypto Market Manipulation
The FSS also plans to expand its use of artificial intelligence (AI) to detect suspicious crypto trading and investigate potential violations. It aims to improve its real-time monitoring systems to catch increasingly complex and large-scale illegal trading.
In February, the FSS upgraded its system to analyze suspected price manipulation in seconds. In May, it introduced a real-time monitoring system and a tool to identify groups suspected of unfair trading. By August, it had developed an AI tool to detect suspicious trading earlier.
The FSS is also improving disclosure rules for crypto companies’ advertising and promotions. In February, it introduced measures to disclose benefits offered through promotions, followed by guidelines for preparing disclosure reports in July.
These efforts are part of South Korea’s preparations for a proposed Framework Act on Digital Assets, which could shape the country’s future crypto regulations.
FSS Plans Stronger Crypto Oversight
Before the new law takes effect, South Korea’s Financial Supervisory Service (FSS) plans to strengthen its oversight of the crypto market.
Its plans include improving how suspicious transactions are monitored and stopped, making disclosure rules clearer, and requiring crypto companies to meet IT security standards similar to those of traditional financial institutions. The FSS also plans to impose stronger penalties for violations.
Will Altcoins Be Affected?
The announcement could affect investor confidence in altcoins, especially tokens controlled by a small number of holders or projects that lack transparency. However, these factors do not automatically mean a project will be investigated.
However, the FSS has not identified any specific project as a target. Any significant market reaction will depend on further regulatory announcements, the identification of specific projects, or evidence of wrongdoing.
At the moment, South Korea’s move signals tighter scrutiny of crypto trading, with AI expected to play a bigger role in detecting suspicious activity. Investors will be watching for further details to understand whether the planned investigations could affect particular tokens or the wider altcoin market.
Related: South Korea Extends Crypto Crackdown From Apps to Websites, Blocking 27 Exchanges
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