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.
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.
South Korea’s Financial Services Commission said it is considering a market-making system for digital assets, after a stablecoin linked to the value of the Japanese yen traded for as much as four times its peg on a major South Korean crypto exchange earlier this month.
Crypto exchange Upbit opened trading of JPYC, a yen-backed stablecoin, on Sept. 17, with the market opening at 12 Korean won per JPYC before reaching a high of 37.6 Korean won just an hour later, more than four times its market value. The spike was attributed to limited liquidity on Upbit.
South Korean academics have debated the market-maker carve-out before. In a 2024 peer-reviewed paper from Seoul Law Review, KB Securities researcher Lee Min Jung said regulators at the time did not allow crypto market making as it could amount to market manipulation. While Lee argued that introducing market makers would be premature due to manipulation concerns, she said regulators could consider a carve-out once the market becomes more stable.