South Korea official discusses AI use for crypto monitoring at FSB meeting

Ahn Chang-guk, a standing member of South Korea’s Financial Services Commission (FSC), participated in the Financial Stability Board (FSB) Regulatory and Supervisory Cooperation Standing Committee meeting in Washington, D.C. The discussions focused on the integration of artificial intelligence (AI) in financial supervision, the management of risks in private credit markets, and improving the quality of external audits.

Ahn highlighted South Korea’s implementation of AI to monitor virtual asset markets, noting that the system can detect irregular transactions such as market manipulation and automate processes from trade analysis to report generation. He also mentioned plans to use AI for consumer protection, including classifying civil complaints and recommending legal precedents.

Regarding private credit, the FSB expressed concerns about its rapid growth and potential to transmit shocks across the financial sector due to its links with banks and insurance companies. Ahn emphasized the need for a balanced approach that supports corporate financing while monitoring risks stemming from high leverage and complex institutional interconnections. Additionally, the committee addressed audit quality, discussing the impact of private equity investment in audit firms and the potential for AI to introduce errors or bias if human oversight is not maintained.