South Korea’s Financial Supervisory Service (FSS) is expanding oversight into crypto market manipulation following operational errors at domestic exchanges. The regulator will target high-risk tactics, including coordinated “whale” activity and schemes exploiting infrastructure disruptions. This follows a Bithumb promotional error where excess Bitcoin was mistakenly credited to users, prompting immediate scrutiny of internal exchange controls.
The FSS is deploying AI-powered surveillance to identify abnormal price movements. Investigations will prioritize “gating” practices, where deposit or withdrawal suspensions create artificial supply constraints. Simultaneously, the Financial Services Commission has ordered a review of internal protocols across all domestic platforms to mitigate volatility risks occurring during scheduled exchange maintenance or technical outages.
A new task force is preparing for the Digital Asset Basic Act’s second phase, focusing on disclosure and licensing. By enhancing automated detection of suspicious accounts, regulators aim to institutionalize market integrity. This indicates a move toward stricter enforcement for South Korea’s digital asset sector as authorities prioritize market stability.
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