South Korea watchdog builds AI system to monitor crypto market manipulation

South Korea’s Financial Supervisory Service has built a market surveillance system that uses artificial intelligence to detect and analyze unfair trading in virtual assets in real time, Digital Asset reported. The move is intended to quickly identify abnormal trading and determine whether probes are needed, given that thousands of tokens trade around the clock across multiple exchanges. The watchdog developed an AI algorithm in January to automatically identify bid quotes by suspected price manipulators and the periods in which they allegedly influenced prices. In April, it added a function to automatically detect multiple linked accounts used in price manipulation. The agency has now expanded AI use across its broader market surveillance work, including unusual-trading detection and decisions on whether to open investigations. Publicly available online information is also included in the AI monitoring scope. The system can detect illegal front-running through chat rooms, the distribution of videos containing false claims, and posts that incite unfair trading.