South Korea Deploys AI to Detect Crypto Market Manipulation

Highlights:

• Regulators have upgraded VISTA with AI to flag suspicious crypto trades faster.
• The new monitoring tools help spot crypto market manipulation across short and long trading periods.
• Stronger penalties and joint teams let authorities step in before illicit crypto profits leave the market.

The Financial Supervisory Service is pushing to upgrade the trading analysis platform VISTA for unfair virtual asset trading investigations through artificial intelligence. The platform already supports core enforcement work across domestic crypto exchanges. However, investigators previously relied on manual analysis to isolate suspicious trading periods. That process required extensive time and delayed case escalation.

🚨 South Korea Deploys #AI To Hunt Unfair #Crypto Trades: Violators Risk Life Prison

South Korea has deployed #AI surveillance to crack down on unfair #crypto trading, with new laws imposing severe penalties for illicit activities#crypto

— CryptOpus (@ImCryptOpus) February 2, 2026

Virtual asset trading volumes in South Korea have been steadily increasing. Trading patterns have been more fragmented across accounts and periods. According to regulators, this complexity diminished the effectiveness of manual reviews. Profits usually moved before investigators could reconstruct activity. VISTA is the primary cryptocurrency analysis tool. It is used to process large volumes of data, calculate abnormal indicators, and visualize trading behavior. Regardless of these capabilities, staff continued to screen suspect windows manually. Authorities recognized that this curtailed early intervention.

Crypto markets operate continuously and move faster than traditional assets. Price swings and liquidity shifts can occur within seconds. As a result, regulators face pressure to detect misconduct during execution rather than after settlement. The VISTA upgrade addresses this enforcement gap.

How VISTA Reconstructs Trading Activity to Expose Crypto Market Manipulation

The Financial Supervisory Service expanded VISTA’s infrastructure in December. It added two servers equipped with high-performance CPUs and GPUs. The upgrade supports shared computing resources and distributed data processing. This environment allows advanced algorithms to run across large datasets.

On top of this infrastructure, the regulator developed an internal detection algorithm. Investigators previously flagged suspicious behavior through repeated manual checks. The new system automates that initial identification stage. Staff now receive structured outputs instead of raw transaction logs.

The algorithm breaks the trading activity of each suspect into detailed time blocks. These stretches can be as brief as seconds or as long as months. The system computes abnormal indicators for each time interval. The algorithm allows a complete search of all potential manipulation windows.

VISTA tracks designed behaviors across markets. These are wash trading, spoofing, coordinated order placement, and sudden volume distortions. The platform also visualizes order flows and account relationships. Investigators rely on these views to facilitate evidentiary analysis. The regulator intends to increase AI functions by the end of the year. It has procured a 170 million won budget to upgrade further servers. According to officials, the funding will enhance the performance of the systems. The aim is to achieve faster detection and investigative handling.

Harsher Penalties and Joint Task Forces Tighten Enforcement Pressure

South Korea extends the capital markets law to virtual asset misconduct. Market manipulation and fraud are already considered criminal offenses in the framework. The penalties can be imprisonment and high criminal fines, while serious cases can face life imprisonment. The new reforms enhanced the penalties associated with the illicit gains.

The fines imposed on crimes may be four to six times the profit made. Administrative fines may even amount to billions of won in cases where gains are hard to quantify. These actions, regulators claimed, will focus on repeat offenders and large-scale offenders. The Virtual Asset User Protection Act came into effect in July 2024.

Authorities established a unified response team last year. The team consists of the Financial Supervisory Service, the Financial Services Commission, and the Korea Exchange. The framework enables the coordination of investigations and accelerated exchange of information. Despite the efforts to detect manipulation in crypto trading, the Gwangju District Prosecutor’s Office lost a significant amount of BTC through a phishing attack a few weeks ago.

JUST IN: 🇰🇷 South Korean prosecutors search for "lost" Bitcoin

– Prosecutors say a “significant” amount of BTC was lost while in state custody
– Loss likely occurred mid-2025, possibly via phishing
– Authorities refuse to disclose how much Bitcoin is missing pic.twitter.com/BexowaFnlX

— Bitcoin Archive (@BitcoinArchive) January 22, 2026