South Korea’s Financial Services Commission is studying whether to introduce a formal market-making regime for virtual assets, according to a report by Digital Asset cited by BlockBeats on Sept. 28. The discussion matters because the country’s current Virtual Asset User Protection Act does not provide an exception for market-making, leaving such activity at risk of being treated as unfair trading or even market manipulation under existing rules.
Ryu Young-jun, a digital finance policy official at the FSC, said the regulator will examine systems including market making in an effort to improve the efficiency and stability of the digital asset market. His comments were interpreted as a sign that South Korea could consider allowing market making in the second phase of its digital asset legislation.
Ryu also said a future Digital Asset Basic Act may tighten oversight of trading platforms, fair trading, corporate governance and conflicts of interest. The broader policy direction under review also covers expanding custody, trading, brokerage, asset management and investment advisory businesses, setting up issuance and disclosure rules for digital assets, advancing a won-denominated stablecoin, strengthening user protection, and potentially shifting key exchange functions such as trade matching, listing and abnormal transaction monitoring from self-regulation toward a public regulatory framework.
South Korea’s Financial Services Commission is studying whether to introduce a market-making system for virtual assets, according to Digital Asset.
The review has drawn attention because the current Virtual Asset User Protection Act prohibits market-making activity. That has led to an interpretation that the FSC may consider permitting market making in the second phase of digital asset legislation.
On Sept. 28, Ryu Young-jun, a digital finance policy official at the FSC, said the regulator will examine related systems, including market making, to improve the efficiency and stability of the digital asset market.
At present, the Virtual Asset User Protection Act provides no exception for market making. As a result, such activity may be restricted because it could be treated as unfair trading, including market manipulation.
Ryu also said a future Digital Asset Basic Act may strengthen regulation in areas including trading platforms, fair trading, corporate governance and conflicts of interest, while also supporting more diverse development across the digital asset industry.
The measures under discussion include expanding businesses such as custody, trading, brokerage, asset management and investment advisory, establishing issuance and disclosure systems for digital assets, advancing a won stablecoin and reinforcing user protection.
He added that core exchange functions, including trade matching, token listing and abnormal transaction monitoring, could gradually move from the current self-regulatory approach to a public regulatory framework.
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