How South Korea Is Using AI to Detect Crypto Market Manipulation

"South Korea is advancing its cryptocurrency market oversight by shifting to AI-driven surveillance. Algorithms now perform the initial detection of suspicious activities instead of relying solely on human investigators. As crypto trading grows faster, more decentralized and increasingly difficult to monitor manually, regulators are leveraging artificial intelligence to identify irregularities and anomalies more quickly. Central to this evolution is the Financial Supervisory Service's (FSS) enhanced Virtual Assets Intelligence System for Trading Analysis (VISTA)."

"The new detection model employs a sliding-window grid search technique, scanning overlapping time segments to spot abnormal patterns such as unusual volume surges. Through 2026, the Financial Supervisory Service plans to enhance AI capabilities with tools to detect coordinated trading account networks and trace manipulation funding sources. Regulators are exploring proactive intervention measures, such as temporary transaction or payment suspensions, to freeze suspicious activity early and prevent the withdrawal of illicit gains."

South Korea is shifting cryptocurrency market surveillance to AI-driven systems that automatically detect suspicious trading activity. Algorithms perform initial detection previously handled manually to keep pace with rapid, decentralized crypto trading. The Financial Supervisory Service upgraded the Virtual Assets Intelligence System for Trading Analysis (VISTA) to analyze trading patterns and spot abnormalities using techniques like sliding-window grid search across overlapping time segments. Planned enhancements through 2026 include tools to identify coordinated trading account networks and trace the funding sources for manipulation. Regulators are considering proactive interventions such as temporary transaction or payment suspensions to freeze suspicious activity and prevent illicit funds from being withdrawn.

Read at Cointelegraph