South Korea considers legalizing crypto market making and tighter exchange oversight
South Korea's Financial Services Commission is reviewing whether to permit crypto market making and shift core exchange functions to public oversight following severe price dislocation in a newly listed stablecoin.
South Korea's Financial Services Commission is reviewing whether to introduce a crypto market-making framework to improve the stability and efficiency of digital asset markets, according to digital finance policy director general Yoo Young-joon. Speaking Monday at The Bridge Summit 2026 in Seoul, as reported by local outlet Digital Asset, Yoo noted that the country's Virtual Asset User Protection Act currently contains no exemption for market makers, meaning the activity falls under prohibitions on unfair trading such as price manipulation.[4][3][2]
The regulatory reassessment comes after the yen-pegged stablecoin JPYC experienced an extreme price spike after listing on Upbit on Sept. 17. The token traded at more than four times its peg, hitting an intraday high of 37.60 won when one yen was worth about 8.85 won. Upbit initially supported deposits only via Ethereum, which held roughly 6.9% of JPYC's supply, before expanding deposits to Kaia and Polygon. According to Upbit figures released by lawmaker Park Min-gyu, 21,219 investors spent about 259.9 billion won buying JPYC at 10% or more above the yen exchange rate between Sept. 17 and Sept. 21.[4][1][6][5]
Yoo stated that under the proposed Digital Asset Basic Act, the second phase of South Korea's crypto legislation, core exchange functions such as listings, order matching, and trade surveillance may move from industry self-regulation to direct public oversight. He added that the upcoming bill is also expected to transition crypto firms from a filing-based framework to a licensing and registration regime, tighten rules for executives and major shareholders, regulate won-pegged stablecoins, and allow domestic token issuance subject to disclosure mandates.[4]
Key facts
- South Korea's FSC is reviewing whether to allow crypto market making to improve digital asset market efficiency and stability.
- Crypto market making currently falls under South Korea's ban on unfair trading and price manipulation because existing investor protection laws contain no exemption for the practice.
- The review was prompted by yen stablecoin JPYC surging to an intraday high of 37.60 won on Upbit—more than four times its peg—against a yen exchange rate of roughly 8.85 won.
- National Assembly lawmaker Park Min-gyu released data showing 21,219 investors spent about 259.9 billion won purchasing JPYC at least 10% above the won-yen exchange rate from Sept. 17 to Sept. 21.
- The proposed Digital Asset Basic Act may shift core exchange operations, including order matching, listings, and abnormal trade surveillance, from self-regulation to public oversight.
- The upcoming legislation could replace crypto filing requirements with a licensing and registration system, govern won-pegged stablecoins, and allow domestic token issuance with disclosure rules.
Sources · 6 sources
- CO
CoinDesk@CoinDeskPost on X ·
NEW: South Korea's FSC is considering introducing a market-making framework for crypto, prompted by $JPYC trading at 4x its peg on @Official_Upbit after listing. https://t.co/HfBXcX3yif
Open source - CN
crypto.news@cryptodotnewsPost on X ·
JUST IN: South Korea’s FSC to review lifting the ban on crypto market makers Current South Korea investor-protection rules treat market making as potentially equivalent to unfair activities such as price manipulation. https://t.co/KRZ9CS0AFv
Open source - TB
The Block@TheBlockCoPost on X ·
NEW: South Korea's FSC said it will review lifting the ban on crypto market makers to improve the efficiency and stability of the digital asset ecosystem, local news outlet Digital Asset reports. The country's investor protection rules currently view market making as equivalent to unfair market activities, such as price manipulation.
Open source - UN
UnchainedArticle ·
South Korean Regulator Considers Legalizing Crypto Market Making, Tighter Exchange Oversight South Korea’s Financial Services Commission will review whether to allow crypto market making , a senior official said Monday, as he outlined how the country’s next crypto law could bring exchanges under public oversight. Yoo Young-joon , the FSC’s director general for digital finance policy, said the agency would review whether market making and similar systems are needed to make digital asset markets more efficient and stable. He spoke at The Bridge Summit 2026 in Seoul, according to the Korean crypto outlet Digital Asset. Market makers post buy and sell orders so traders can get in and out without large price swings. South Korea’s Virtual Asset User Protection Act has no exemption for market making, so the practice falls under its ban on unfair trading such as price manipulation, Digital Asset reported. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . Exchanges Under Public Oversight Yoo also discussed several items under review for the proposed Digital Asset Basic Act , the bill that makes up the second phase of the country’s crypto legislation. He said it may be time for core exchange functions, including order matching, listings and surveillance for abnormal trades, to move from self-regulation to public oversight. He cited the recent listing of a yen stablecoin as an example, saying there had been criticism that users lost money in its price surge and that calls for rules were growing. Upbit began trading JPYC , a stablecoin designed to be worth one Japanese yen, on Sept. 17. At first the exchange accepted deposits only over Ethereum, which held about 6.9% of the token’s supply. After trading opened that evening, the price hit an intraday high of 37.60 won , when one yen was worth about 8.85 won. Upbit added deposits the same evening on the Kaia and Polygon networks, which carried more of the supply, and the price later returned to around one yen. Upbit data released Sept. 27 by Park Min-gyu, a Democratic Party of Korea lawmaker on the National Assembly’s Political Affairs Committee, shows that 21,219 investors bought JPYC at 10% or more above the won-yen rate between Sept. 17 and Sept. 21, spending about 259.9 billion won in total. The Next Crypto Law Yoo also said rules for crypto firms’ major shareholders and executives could tighten, scaled to a firm’s size and business. He said the bill could move crypto businesses from the current filing-based system to licensing and registration, and expected it to allow domestic token issuance with disclosure rules and cover won-pegged stablecoins. Related Listen: Why the Crypto Market Cap Could Reach $50 Trillion This Cycle The post South Korean Regulator Considers Legalizing Crypto Market Making, Tighter Exchange Oversight appeared first on Unchained .
Open source - CT
Coin TelegraphArticle ·
South Korea weighs crypto market makers after JPYC trades at 4 times peg Crypto market making is effectively restricted under South Korea’s manipulation rules, but regulators are reconsidering the approach after a JPYC spiked on Upbit this month.
Open source - CO
Cointelegraph@CointelegraphPost on X ·
🇰🇷 NEW: South Korea's Financial Services Commission is weighing a crypto market-making system after yen stablecoin JPYC traded at over four times its peg on Upbit. https://t.co/oJ7xuy5pVB
Open source