South Korea is considering creating a crypto bubble after JPYC bought and sold at four times the strike price.

South Korea's Financial Services Commission considers the market maker system behind JPMorgan Chase[14] to have won more than four times its benchmark.

What is this event?
South Korea's Financial Services Commission said it was considering using a market maker system for digital assets following the JPYC case, in which stablecoins tied to Japanese yen were traded on major South Korean crypto platforms at more than four times their benchmark price earlier this month.
The JPYC was launched by the AppBit platform on 17 September, with an opening price of 12 South Korean won per 1 GPYC. Then within just one hour, it reached a peak at 37.6 South Korean Won which is more than 4 times its market value.

Why is this important?
Digital Asset News reported that Yoo Young-joon, director of digital currency policy at the Financial Services Commission of South Korea, said at a meeting in Seoul on Monday to consider the need for introducing various systems such as market maker activity to increase efficiency and stability of the digital asset landscape. He also noted that there is criticism that user damage was caused by post-IPO price surges, so he strongly called for more discipline on this issue and expanded it.
Currently, the Digital Asset Consumer Protection Act or Virtual Assets User Protection Act has no exceptions to market making exemption from regulation on market manipulation, preventing market makers from accessing full bid and offer rates or loopholes in crypto markets. The latest comments by Yoon Jun reflect that South Korea's Financial Services Commission is considering such a position.
Scholars in South Korea have previously argued for an exemption to market makers in a peer-reviewed research paper published by the Seoul Review last year.2024 Emin Jung, a researcher from KBC Securities noted that at the time regulators did not allow crypto trading because it could be traded as a transaction. She also argues that bringing in marketmakers may have been premature compared with concerns about market manipulation but regulators might consider such exceptions when markets are more stable.[3]
Prior to the JPYC case, researchers had long called for a systematic market maker framework. In an article by Choi Yoon-young of Corbit Research Center, he estimated that domestic crypto markets suffered from severe instability because there was no formal market makers' system, resulting in high price differentials and volatility, citing Kim Ji-Pyeom as an example of South Korea's declining cryptocurrency performance.37.6

How would that affect the reader?
The market maker movement comes as South Korea is laying out a regulatory framework to oversee the broader crypto industry. South Korea's Financial Services Commission had indicated in July that it planned to enact the Digital Asset Basic Act, a comprehensive package covering stablecoins and cryptocurrencies more broadly, including rules for digital asset transactions, trading platforms, disclosure of information, and internal controls, but lawmakers remained inconclusive on several key aspects of the bill, including regulations for stablecoin speculators.2024
For the general reader, the JPYC case illustrates that when market conditions are weak and rules do not encourage market participants to participate, prices of digital assets can run very far from their reference value. Even stablecoins should be volatile, so users need to understand market mechanics, depths of loopholes, and price risks.
In the Thai context, even though this news comes from South Korea, the same issue affects the SEC (Thailand) Thais as a regulator overseeing digital asset markets and involves Bitcube-like platforms where users have to compare prices and depth of the market before trading. Users in the region, including those who may be using Baht or Jade currency benchmarks in Myanmar, also need to follow regulation design that balances market stability with safe access for traders.
In related news, South Korea has lowered the minimum requirements of Travelru's law for digital asset transfers. On other topics that were published simultaneously, Thorchen was criticized from the Bitgate case while ETH was considered to be overdeveloped as a blockchain in Holder Digest.