South Korea’s Financial Services Commission (FSC) is studying whether a formal market-maker regime should be written into the country’s next digital asset law after a yen-linked token listed on Upbit briefly traded at several times the value it is meant to hold.
The catalyst was JPYC, a Japanese electronic payment token designed to stay near one yen.
Upbit opened won pairs on September 17 with a published reference near 8.8 won.
Early trades printed around 12 won, then climbed to 37.6 won within about an hour—more than four times that reference.
The move was not a reserve collapse.
It was a secondary-market squeeze: new demand hit a shallow book while transferable supply on the exchange was still limited, and Korean holders could not redeem at par inside Upbit.
Redemption sits with the Japanese issuer.
Once extra tokens reached the venue, the premium faded.
Even so, tens of thousands of buyers paid well above the won-yen equivalent in the first days, and some were left with losses after the price fell back.
Similar listing distortions hit other fiat-linked coins on Korean platforms the same month, which is why the episode is being treated as a market-structure problem rather than a one-off curiosity.
Yoo Young-joon, the FSC’s director of digital finance policy, told a Seoul conference that the commission will review whether tools such as market-making should be introduced to raise efficiency and stability.
He also acknowledged criticism that users lost money after the JPYC spike and said calls for tighter discipline are growing.
Officials have indicated the question will be examined during work on the second-stage Digital Asset Basic Act, not as a standalone emergency rule.
That review collides with existing law.
The Virtual Asset User Protection Act does not carve market making out of market-manipulation bans.
Continuous two-sided quoting, which is ordinary infrastructure in equities, can be treated as unlawful price influence in crypto.
The result is thinner books, larger listing premia, and wider gaps between local and offshore prices—the so-called kimchi premium.
Researchers and exchange-affiliated analysts have argued for years that the absence of licensed liquidity providers leaves new listings and future won stablecoins exposed.
Industry groups now want future rules to cover initial circulating supply, issuance and redemption channels, designated liquidity providers, and disclosure when prices drift from a reference.
Any exemption would have to be narrow.
The same legislation is expected to tighten exchange capital, shift core surveillance from self-regulation toward public-law oversight, and still settle who may issue a won stablecoin.
Market makers can compress dislocations; they can also be used to dress up abusive trading.
That is why academics previously warned that a carve-out should wait until markets and supervision are stronger.
The policy choice is now concrete.
Korea can keep treating liquidity provision as suspect and accept violent first prints when a foreign stablecoin lists.
Or it can license quoting under capital, inventory, and surveillance rules so a token meant to track one yen does not trade like a scarce meme coin for an hour. JPYC showed the cost of the first option. The second-stage bill will show whether regulators will try the second.
