South Korea’s FSS expands consumer-protection monitoring across virtual assets and leveraged investing

  • The FSS is expanding preventive monitoring of virtual-asset trading and preparing stronger safeguards for credit financing and margin trading.
  • The regulator cited digital-asset price distortions and volatility, while KOSPI daily return volatility rose 2.5-fold from 1.4% in 2025 to 3.6% in the first half of this year.
  • Complaints and disputes continued to rise faster than resolutions as the FSS strengthened product oversight, AI risk controls and consumer-protection reforms.

South Korea’s Financial Supervisory Service (FSS) is expanding preventive monitoring of suspicious virtual-asset trading to cover spoofing, concentrated trading and excessive order revisions, while preparing stronger safeguards for leveraged investments such as credit financing and margin trading. At a Financial Consumer Protection Performance Report to the Public event on the 17th, the FSS said digital-asset markets are particularly vulnerable to unfair trading because of market-specific price distortions and high volatility. The regulator is in final-stage consultations with the Financial Services Commission on measures that could restrict margin trading by minors, require additional confirmation from elderly investors, provide forced-liquidation simulations and improve advance notifications. The FSS also reported 94 regulatory improvements based on complaints and disputes, 463,000 records shared through its ASAP voice-phishing platform and 66.36 billion won in prevented losses. Complaints and filings continued to outpace resolutions, while short-term sales incentives remained a concern, and the agency plans to launch an AI Complaint Portal in January next year.

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