JPYC’s 4x spike on Upbit forces South Korea crypto regulation review

A yen-pegged stablecoin briefly traded for more than four times its intended value on one of South Korea’s biggest crypto exchanges this month, and the fallout is now pushing regulators to reconsider rules that have kept professional market makers out of the country’s digital-asset trading. The episode has turned into a live case study for South Korea crypto regulation, exposing how thin liquidity can distort prices even for assets designed to track a stable, real-world currency.

Key takeaways

• JPYC, a yen-backed stablecoin, jumped to 37.6 Korean won on Upbit on September 17, more than four times its roughly 8.8-won reference value, after opening near 12 won.
• According to Upbit data given to a lawmaker, 21,219 investors purchased JPYC at rates exceeding the yen-won reference by more than 10% during the subsequent five days, collectively spending roughly 259.9 billion won.
• South Korea’s Financial Services Commission is now reviewing whether to allow a formal market-making system, something currently restricted under the country’s virtual-asset market manipulation rules.
• Similar liquidity-driven spikes hit PYUSD on Upbit and EURC and USDG on Bithumb in September, adding pressure for broader liquidity safeguards.
• South Korea’s second-stage digital asset legislation, the Digital Asset Basic Act, is expected to reach a National Assembly review subcommittee in November.