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.

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. 

“We will also review the need to introduce systems such as market-making activities to increase the efficiency and stability of the digital asset landscape,” Yoo Young-joon, director of digital finance policy at the FSC, said at a conference in Seoul on Monday, Digital Asset reported. “There were also criticisms that user losses occurred from the price surge after the JPYC listing, so demands for discipline in this area are expanding.”

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