South Korea Upgrades AI Surveillance to Fight Rising Crypto Manipulation

Highlights:

• South Korea moves to strengthen crypto oversight as suspicious transactions surged repeatedly.
• Financial Supervisory Service adds Nvidia H100 GPU to expand AI-powered surveillance capacity
• Upgraded VISTA platform aims to detect coordinated manipulation and abnormal trading patterns faster

South Korea is tightening its grip on crypto market manipulation as suspicious activity continues to rise. A local news outlet reported on Feb.16 that the country’s Financial Supervisory Service, known as FSS, is upgrading its artificial intelligence system to improve real time detection of abnormal trading patterns and coordinated activity.

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The regulator plans to expand its internal servers this year with a budget of 170 million won, around $117,640. The funds will be used to purchase an additional Nvidia H100 graphics processing unit by the second quarter. The H100, released in 2022, remains one of the most widely used chips for artificial intelligence training and data analysis.

This follows last year’s upgrade, when the FSS acquired two H100 units and secured 220 million won, roughly $152,240, for server expansion. Those upgrades strengthened VISTA, an AI platform launched in 2024 to detect unfair virtual asset transactions.

VISTA Targets Hidden Crypto Manipulation Patterns

The VISTA platform uses a method that scans trading data across different time intervals instead of relying on investigators to manually select suspicious periods. According to the regulator, the algorithm examines potential sub-periods in trading records using a sliding window grid search model.

In internal testing using completed investigation cases, the upgraded system reportedly detected all previously identified manipulation windows. It also flagged additional suspicious intervals that traditional methods struggled to uncover.

Authorities now aim to further improve the system’s ability to detect coordinated accounts used in market manipulation. Plans are also underway to develop a large language model capable of analyzing messages linked to unfair trading schemes. Another proposal under review involves building an independent AI system that monitors crypto markets in real time.

According to Yonhap, Korea's FSS announced its 2026 plan on Feb 9: investigations into high-risk crypto manipulations (whale, containment/ramp schemes, API orders, SNS misinformation) with AI text/surge detection tools; new Digital Asset Basic Act group for phase-2 legislation…

— Wu Blockchain (@WuBlockchain) February 9, 2026

Currently, the FSS receives market trend data only once per day. A real-time system would allow the watchdog to quickly determine whether sudden price swings were caused by market forces or technical issues at exchanges. One insider from the FSS stated, “If further AI enhancements are deemed necessary, the agency will pursue additional GPU acquisitions.”

Crypto Suspicious Reports Hit Record Levels

The AI expansion comes as suspicious crypto activity continues to climb. From January to August last year, local virtual asset service providers submitted 36,684 reports flagging suspicious transactions. That figure exceeded the combined 35,734 reports recorded across 2023 and 2024. The growth over the past few years has been sharp. Authorities recorded 199 flagged cases in 2021. That number rose to 10,797 in 2022, increased to 16,076 in 2023, and reached 19,658 in 2024.

According to Yonhap News, South Korean virtual asset service providers filed 36,684 suspicious transaction reports (STRs) from January to August 2025 — surpassing the combined total of the previous two years (35,734). The Korea Customs Service reports that from 2021 to August…

— Wu Blockchain (@WuBlockchain) September 22, 2025

Customs officials said 9.56 trillion won, about $7.1 billion, in virtual asset cases were referred to prosecutors between 2021 and August 2025. Roughly 8.62 trillion won of that amount was tied to hwanchigi style schemes, where cryptocurrency is used to transfer funds overseas without going through banks.

Why This Matters

South Korea remains one of the most active crypto markets in Asia. As trading volumes grow, so does the complexity of monitoring digital transactions. The FSS is clearly signaling that traditional investigative tools are no longer enough.

With the expansion of AI technology and computing power, the regulators are looking to go from reactive to proactive detection. Whether the new technology can adapt quickly enough to the changing methods of manipulation remains to be seen. However, the volume of suspicious activity reports indicates that the crackdown is unlikely to ease anytime soon.

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