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South Korea digital asset regulation and AI integration

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2026-10-14 04:10 UTC → 2026-10-19 03:42 UTC · added ~~removed~~

South Korean financial authorities are advancing regulatory frameworks and technological integration for the digital asset sector. Lee Eok-won, Chairman of the Financial Services Commission (FSC), announced plans to accelerate the Digital Asset Basic Act to establish a healthy ecosystem and combat financial crimes like voice phishing. To support this, Lee proposed easing network separation regulations to allow financial institutions to utilize AI-driven security tools for proactive monitoring and vulnerability detection. Following these domestic developments, FSC member Ahn Chang-guk represented South Korea at a Financial Stability Board meeting in Washington, D.C. Ahn detailed the implementation of AI systems designed to monitor virtual asset markets for irregular transactions, such as market manipulation, and to automate trade analysis. Discussions also addressed the management of risks in private credit markets and the importance of maintaining human oversight to prevent AI-induced errors or bias in financial audits. Building on these initiatives, the Financial Supervisory Service (FSS) is moving to strengthen cybersecurity following recent hacking incidents and customer data leaks. During a National Assembly audit, FSS Governor Lee Chan-jin emphasized the necessity of an “AI-based defense against AI-based attacks” to counter evolving threats. The FSS plans to mandate systematic IT asset management, enhance vulnerability assessments, and expand mock hacking exercises to include AI-driven penetration attacks. In a significant development, the heads of South Korea’s five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—were summoned as witnesses. While Shinhan, KB Kookmin, and Hana Bank confirmed customer data leaks, Woori and NH Nonghyup reported similar attacks that did not result in breaches. The FSS is now considering institutional improvements to encourage increased security investments and personnel in consultation with the FSC.

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