Financial Regulator Deploys AI to Monitor Crypto Market 24/7
South Korea’s financial regulator has launched an artificial intelligence-based surveillance system to detect market manipulation and other forms of unfair trading in the cryptocurrency market in real time.The Financial Supervisory Service (FSS) said on Aug. 20 that it has developed an AI-powered ma
South Korea's Financial Supervisory Service (FSS) has deployed an AI-powered surveillance system to monitor the cryptocurrency market 24/7, aiming to detect market manipulation and unfair trading practices in real time. The AI system, which combines generative AI with machine-learning algorithms, addresses the challenges of monitoring thousands of crypto assets across multiple exchanges with limited human investigators.
Key features of the system include the ability to detect short-term price manipulation, such as "racehorse" and "cage" schemes, as well as identifying wash trading and coordinated trading. The AI system also analyzes online platforms, including YouTube and message boards, to identify potential signs of unfair trading. The final decision on whether to launch an investigation rests with FSS investigators, who review AI-generated reports before taking action. The FSS plans to further expand the system to track fund flows and blockchain-based transactions.
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