How Do CEXs Use AI/Machine Learning to Improve Market Surveillance?

CEXs use AI and Machine Learning (ML) to process the massive volume of trading data more efficiently than human analysts. ML models are trained to recognize subtle, complex patterns indicative of market manipulation (like evolving spoofing techniques or coordinated pump-and-dumps) that might evade simpler rule-based systems.

AI helps to reduce false positives, prioritize high-risk alerts, and adapt quickly to new forms of manipulation, thus improving the overall effectiveness of surveillance.