South Korea’s Financial Services Commission considers introducing a virtual asset market-making system during the second phase of legislation

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【South Korea’s Financial Services Commission is considering introducing a virtual asset market-making system】

South Korea’s Financial Services Commission (FSC) Digital Finance Policy Officer Yoo Young-jun said that it is considering introducing a market-making system for the virtual asset market to improve market efficiency and stability. Although the current Virtual Asset User Protection Act prohibits market-making activities, this move indicates that FSC intends to revisit and consider introducing the mechanism during the second phase of the legislative process. Yoo Young-jun also noted that exchanges need sufficient capital and operational capabilities; core functions, including trade execution, trading support, and abnormal-transaction monitoring, may shift from self-regulation to statutory regulation; governance rules concerning major shareholders and management are expected to be strengthened; and once the bill is implemented, it could promote greater industry diversification, the development of a trusted trading environment, digital asset issuance and disclosure frameworks, Korean won stablecoins, and stronger user protection.

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Key points

South Korea’s Financial Services Commission is considering introducing a market-making system for the virtual asset market.
Yoo Young-jun said that the move is intended to improve market efficiency and stability.
The current Virtual Asset User Protection Act prohibits market-making activities.
Exchanges may need to have sufficient capital and operational capabilities.
Core exchange functions, including trade execution, trading support, and abnormal-transaction monitoring, may shift from self-regulation to statutory regulation.
Governance rules concerning major shareholders and management are expected to be strengthened.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

Market makers typically help facilitate smoother market trading by continuously providing bid and ask quotes. This refers to South Korea’s Financial Services Commission considering the relevant system and does not mean that the system has already been implemented.

Why it matters to readers

If the system is ultimately implemented, it could affect the operations, regulation, and trading environment of South Korean virtual asset exchanges.

This indicates that virtual asset trading rules may change, but the matter remains under consideration, and it is not possible to determine from this how asset prices will change.

Risks and unknowns

The provided text does not confirm a formal bill, implementation timeline, or final regulatory requirements.
Market-maker access, capital requirements, and conflict-of-interest rules remain unclear.
It remains unknown whether the framework will ultimately be approved and whether the current prohibition on market making will change.

South Korea’s Financial Services Commission considers introducing a virtual asset market-making system during the second phase of legislation

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