South Korea’s Financial Supervisory Service has asked 15 major virtual asset service providers to reinforce internal controls and get ready for a new round of regulatory changes. At a meeting on Wednesday, FSS head Lee Chan jin told industry executives that market confidence cannot rest on sanctions alone and that strong corporate governance is the base of trust.
The discussion centered on proactive compliance rather than relying only on enforcement after problems occur. Lee urged firms to build stronger governance structures to support more sustainable growth across the crypto sector.
Firms told to prepare for legal and compliance changes
The FSS said companies should watch several pending policy developments closely. These include a draft law focused on digital assets, revisions to financial information rules, and updates to foreign exchange legislation. Firms were told to monitor the legislative process and adjust quickly as new compliance requirements take shape.
According to the material, the FSS stepped up oversight of the crypto market in February 2026. The regulator said the tighter approach is intended to curb market manipulation and improve investor protection, with enhanced monitoring of suspicious transactions forming a central part of that plan.
AI and real-time analytics set for wider surveillance role
The regulator also plans broader use of artificial intelligence and real-time analytics in market surveillance. The FSS said those systems can help flag large transactions, abrupt price moves, and coordinated manipulative activity. That points to a regulatory shift away from a model centered mainly on punishment and toward preventive supervision.
Lee said the crypto market showed weakness in the first half of 2026, citing changing fund flows and recent challenges tied to Bitcoin payments. Even so, he said the sector’s long-term outlook remains strong.
He also pointed to rising stablecoin usage as a notable sign of industry growth. Stronger links between blockchain technology and traditional finance, along with expanding tokenization efforts, were presented as signs that the market’s foundation is becoming broader.
Industry asks for phased rollout of new rules
Executives at the meeting said they would strengthen internal controls and follow both statutory duties and self-regulatory standards. That framework covers token listing procedures as well as marketing and promotional activity. Participants also stressed that trading platforms need to identify disruptive conduct before investors suffer losses.
At the same time, industry representatives called for a phased implementation of new rules. Officials noted that firms differ sharply in size and operational capacity, and warned that one uniform set of requirements could weigh too heavily on smaller companies. They also asked for targeted policy support to help preserve the sector’s competitive position.