1. Short Description
South Korea’s top financial watchdog unveils a 2026 crackdown on crypto market manipulation, targeting ‘whales’, API-driven schemes, and exploiting exchange outages.
2. Read Time
2 minutes, 15 seconds
3. Main Article
South Korea Intensifies Crypto Market Surveillance for 2026
South Korea’s Financial Supervisory Service (FSS) has announced a significant escalation in its monitoring and enforcement actions against cryptocurrency price manipulation, with a comprehensive plan set for 2026. The regulator, led by Governor Lee Chang-jin, will target high-risk trading practices that distort market integrity, including coordinated “whale” activity and schemes that take advantage of exchange infrastructure disruptions, a practice locally known as “gating.” This move signals a shift toward a more aggressive and technologically sophisticated regulatory stance within one of the world’s most active digital asset markets.
The planned investigations will focus on specific tactics like artificial price swings during exchange deposit or withdrawal suspensions, manipulation using automated market-order APIs, and coordinated social media campaigns designed to spread false narratives. To combat these, the FSS will strengthen its automated detection systems, analyzing abnormal price movements at very short intervals and developing tools to flag suspicious trading “sections” and account clusters. This initiative builds on the agency’s recent expansion of AI-powered surveillance tools introduced in early February, reducing reliance on manual oversight.
This regulatory push gains urgency from recent incidents at major domestic exchanges like Bithumb and Upbit, which highlighted vulnerabilities in operational controls. Following a promotional error at Bithumb that caused sharp price swings, the Financial Services Commission (FSC) ordered a sweeping review of internal systems across all local platforms. The FSS is also concurrently establishing a specialized task force to prepare for the implementation of the forthcoming Digital Asset Basic Act, focusing on framework elements like disclosure requirements and exchange oversight rather than direct enforcement, laying a comprehensive foundation for market stability.
4. Short Summary
South Korea’s FSS is preparing a major 2026 crackdown on crypto manipulation, focusing on whale trading, API abuse, and schemes exploiting exchange outages. By deploying advanced AI surveillance and automated detection tools, the regulator aims to curb abnormal price movements and strengthen overall market integrity. This effort is reinforced by recent exchange incidents and preparations for the country’s upcoming Digital Asset Basic Act.
