South Korea is targeting high-risk crypto manipulations, notching up efforts to curb illegal crypto activities. The nation’s Financial Supervisory Service (FSS) has laid out its new 2026 Digital Asset Oversight plan to prioritise a crackdown on Illicit digital asset activity and hold companies accountable for their actions.
The regulator is planning to probe suspected price-manipulation tactics and schemes that artificially inflate or crash token prices. The watchdog’s new plan will also heavily focus on issuing fines when exchanges or platforms suffer preventable IT disruptions.
The move shows a tougher stance intended to protect investors and make the markets more open. The stricter oversight follows South Korea’s 2025 loss of 160 trillion won ($110 billion) to illegal cryptocurrency transfers.
The new blueprint can also help strengthen internal controls, risk management systems, and overall operational resilience for digital-asset businesses.
Digital Asset Oversight Plan: Key focus areas
The FSS is planning to run investigations focused on high-risk trading practices that threaten fair pricing. Regulators are zeroing in on tactics like “big whale” manipulation, where large players use massive funds to sway prices.
Another area of surveillance will be “fence” strategy, which exploits tokens with frozen deposits or withdrawals.
The final big watch-zone mentioned in the new crypto law is “racehorse” pumps that drive sudden spikes through bulk buying.
Authorities are also tracking Application Programming Interface (API) driven automated trades and social-media scams that spread misleading information to lure investors.
The FSS also plans to use AI tools that can find unusual price changes in real time and flag suspicious trading groups. The move represents a sign of a tougher stance as regulators work to make the virtual asset ecosystem safer and more open.
Regulator forms task force to prepare for Digital Asset Act rollout
The Financial Supervisory Service has also created a task force intended to prepare the ground for the implementation of new rules and ensure a smooth transition to the next crypto regulation phase.
The regulator will develop new disclosure rules for token issuance and listings on exchanges, and write licensing and review rules for digital asset companies and stablecoins.
The watchdog also plans to use different fee models for platforms to make competition more fair and help investors make better choices. Further, the government is working on stronger ways to punish people who commit financial crimes against small investors, in addition to making changes to the industry.
The actions are a part of a greater effort, which aligns with President Lee Jae-myung’s idea of cracking down on financial exploitation and building a safer, more transparent digital asset market.