The South Korean Financial Supervisory Service (FSS) announced to the public on February 9 the comprehensive audit plan for 2026 that it prepared to increase transparency and prevent manipulation in cryptocurrency markets. The Seoul-based authority is ushering in a new era of discipline in the world of digital assets, especially with artificial intelligence-supported monitoring systems and harsh criminal sanctions. The strategy, which gained momentum after the massive operational error on the Bithumb exchange, carries the vision of protecting investors and ensuring market integrity.
Artificial Intelligence Supported Monitoring and Strict Control Mechanism
FSS’s new strategy centers on high-tech products that can detect suspicious transaction movements within minutes. The institution will instantly scan for coordinated price movements, organized manipulation schemes and attempts to mislead the market. In particular, the effects of large-scale “whale” transactions on price stability, API-based automated trading and disinformation spread through social media will be on the regulator’s radar.
The focus of inspections is not only on individual manipulators, but also on institutions that show operational weaknesses. Much more severe penalties are now foreseen for serious malfunctions in the IT systems of financial institutions. In order to close security gaps and minimize system risks, an accountability model in which technology managers will bear direct responsibility is being implemented.
Price fluctuations at critical moments when exchanges suspend deposits and withdrawals will be scrutinized by inspectors. By blending telecommunications and financial data, the institution aims to stop not only market manipulation but also voice phishing and fraud cases at an early stage.
Digital Asset Law and Effects of Bithumb Incident
The erroneous transfer of 620 thousand Bitcoins on Bithumb, South Korea’s second largest crypto exchange, played a triggering role in the tightening of regulations. The price turmoil created by billions of dollars in assets mistakenly transferred to users during a promotion prompted the FSS to intervene directly and launch an investigation. The chaos that occurred despite the stock market taking back most of the funds proved once again how fragile the market can be.
The established Digital Asset Basic Law Committee will determine new rules in a wide range of areas, from token issuances to transparency standards. While licensing guidelines for stablecoin providers and crypto operators are being prepared, standard reporting formats will be introduced so that exchange commission rates can be easily compared by users.
In this new era, financial technology security is no longer a choice but a necessity. FSS aims to make the ecosystem more resilient with regular vulnerability scans and mandatory security disclosures. Any initiative that undermines investor confidence will be met with heavy sanctions and advanced tracking systems.
