In brief
- South Korea’s Financial Services Commission will review whether to allow crypto market making, which the current user protection law treats as unfair trading.
- The FSC’s digital finance chief said exchange listings, order matching and trade surveillance may move from self-regulation to public oversight.
- He cited Upbit’s JPYC listing: 21,219 users bought the yen stablecoin at least 10% above the won-yen rate in its first five days, per Upbit data.
South Korea may soon let professional firms make markets in crypto. Yoo Young-joon, director general for digital finance policy at the Financial Services Commission (FSC), told The Bridge Summit 2026 in Seoul on 28 September that the regulator will review “the need to introduce systems such as market making to raise the efficiency and stability of digital asset markets,” Digital Asset reported.
Market makers keep buy and sell orders on the book so traders can get in and out without big price jumps. Korea’s Virtual Asset User Protection Act, in force since July 2024, has no exemption for them. The practice counts as unfair trading, like price manipulation, so it is banned on local exchanges today.
The JPYC case
Yoo used a recent listing to argue that exchanges need firmer rules. Upbit opened trading in JPYC, a stablecoin meant to track one Japanese yen, on 17 September. Supply on the exchange was thin, buyers piled in, and the token hit 37.6 won that day, close to four times the exchange rate, Financial News reported. It fell back to the yen rate once new tokens were issued and arbitrage traders stepped in.
The cost to buyers was large. Upbit data released on 27 September by Park Min-gyu, a Democratic Party lawmaker on the National Assembly’s Political Affairs Committee, shows 21,219 investors bought JPYC at 10% or more above the won-yen rate between 17 and 21 September. They spent about 259.9 billion won. Another 2,574 paid more than three times the reference price. Most of them lost money as the price came back down.
“There were complaints that users were harmed by the price surge after the JPYC listing, so calls for rules in this area are growing,” Yoo said. A market maker with inventory on both sides of the book is the kind of player that could have damped that spike.
What the next crypto law may cover
Yoo was speaking about the Digital Asset Basic Act, the second phase of Korea’s crypto legislation. He said it may be time for core exchange functions, “order matching, listing support and abnormal trade monitoring,” to shift from self-regulation to public oversight. Rules on major shareholders and executives could tighten, scaled to each firm’s size.
He also expects the bill to move crypto firms from today’s filing system to licensing and registration, allow domestic token issuance with disclosure rules, and cover won-pegged stablecoins. No bill text or timetable was given, and the FSC has not published a proposal on market making.
The timing matters. Korea Blockchain Week runs in Seoul this week, and a 22% tax on crypto gains above 2.5 million won a year is due to start on 1 January 2027, crypto.news reported.
Sources
- Digital Asset (디지털애셋), Yoo Young-joon remarks at The Bridge Summit 2026, 28 September 2026
- Financial News (파이낸셜뉴스), Upbit JPYC buyer data from Rep. Park Min-gyu’s office, 27 September 2026
- crypto.news, “South Korean lawmaker calls for two-year delay to crypto tax”, 29 September 2026
- Unchained, “South Korean Regulator Considers Legalizing Crypto Market Making, Tighter Exchange Oversight”, 28 September 2026
