Korea Weighs Legalizing Crypto Market Making After JPYC's 4x Spike

South Korea's Financial Services Commission said on Monday that it will review whether to allow market making in digital assets, an activity the country's current crypto law treats as manipulation. Yoo Young-joon, the FSC's director general for digital finance policy, put the review on the record at The Bridge Summit 2026 in Seoul. The trigger was eleven days old. JPYC, a yen-pegged stablecoin, was listed on Upbit on 17 September and traded as high as 37.6 won against a yen worth about 8.8 won. Retail buyers were left holding the gap. Unchained reports the commission is also weighing a shift of exchange listing and surveillance duties out of self-regulation.

What the law forbids

Market making is the business of quoting a bid and an offer at once, so that anyone wanting to trade finds a counterparty. Korean equities allow it. The Virtual Asset User Protection Act, which governs crypto trading in Korea, carries no exemption for it, and designated two-sided quoting falls inside the act's ban on unfair trading. Coingape put the position plainly: legal in stocks, barred in tokens. The JPYC episode showed what that does to a thin new listing.

Yoo's remark reaches English in two renderings. Coingape has the FSC official saying the commission would "review the necessity of introducing systems such as market-making activities to enhance efficiency and stability of digital asset markets". Cointelegraph's translation carries the same sense in different words, and neither outlet published the Korean original. Coingape also has Yoo acknowledging user losses from the listing, and carries one line no other account in this sweep does.

"Demands for discipline in this area are expanding," Yoo said.

Two ways to measure the same spike

The 37.6-won print is agreed across four accounts. What it gets measured against is not. Cointelegraph puts JPYC's opening price at 12 won and calls the peak four times market value. Coingape and Cryptonomist give the reference rate for one yen as about 8.8 won, and Unchained as about 8.85, which makes the peak more than four times the peg and roughly three times the open. All four accounts describe the move as 4x. Those framings do not reconcile, even though the price prints behind them are the same.

The loss figure depends on who is counting

Seoul Economic Daily published holder-level arithmetic on 27 September, from figures supplied to a National Assembly policy committee. It counted 21,219 investors who bought JPYC at more than a 10 percent premium to the reference rate between 17 and 21 September. They spent 259.9 billion won, about $186 million, on 12.76 billion tokens. Of those buyers, 7,006 sold at a gain. By 21 September 3,792 were still holding, with unrealized losses the paper put near 5.03 billion won, an average of 1,325,530 won each.

Unchained and Cryptonomist both describe the 259.9 billion won as the losses themselves. Seoul Economic Daily has the same number as the amount spent. The two accounts do not reconcile, and only the smaller figure is attached to a holder count.

What the next bill has to settle

A carve-out for market makers would arrive in the second phase of Korea's crypto legislation, the Digital Asset Basic Act, which also covers exchange licensing, token issuance and disclosure. Cryptonomist reports that the bill should reach a National Assembly review subcommittee in November, with about ten digital-asset and stablecoin proposals pending. That timing rests on one outlet. Rules for won-denominated stablecoin issuers are still unsettled inside the same bill. None of the accounts in this sweep says whether Upbit's operator, Dunamu, wants designated quoters on its own order books.

Cryptonomist also reports that JPYC drifted back to the 8-won range the day after the spike, once Upbit opened deposits over the Kaia and Polygon networks. No other outlet retrieved here confirms that sequence. Nothing in Yoo's remarks set a date for a decision, and the FSC has published no consultation paper. Until the act moves, a Korean listing with no designated quoter can still open at several times the thing it is pegged to.