Autor Cointelegraph By Felix Ng

South Korea’s Financial Services Commission said it is considering a market-making system for digital assets, after a stablecoin linked to the value of the Japanese yen traded for as much as four times its peg on a major South Korean crypto exchange earlier this month. Crypto exchange Upbit opened trading of JPYC, a yen-backed stablecoin, on Sept. 17, with the market opening at 12 Korean won per JPYC before reaching a high of 37.6 Korean won just an hour later, more than four times its market value. The spike was attributed to limited liquidity on Upbit. “We will also review the need to introduce systems such as market-making activities to increase the efficiency and stability of the digital asset landscape,” Yoo Young-joon, director of digital finance policy at the FSC, said at a conference in Seoul on Monday, Digital Asset reported. “There were also criticisms that user losses occurred from the price surge after the JPYC listing, so demands for discipline in this area are expanding.”South Korea’s Virtual Asset User Protection Act currently does not contain an exemption for market-making from its market manipulation provisions, preventing market makers from providing liquidity in crypto markets. The latest comments from Yoo suggest the FSC could be reconsidering this decision. South Korean academics have debated the market-maker carve-out before. In a 2024 peer-reviewed paper from Seoul Law Review, KB Securities researcher Lee Min Jung said regulators at the time did not allow crypto market making as it could amount to market manipulation. While Lee argued that introducing market makers would be premature due to manipulation concerns, she said regulators could consider a carve-out once the market becomes more stable. Researchers had called for a formal market-making framework long before the recent JPYC episode. A paper by Yoonyoung Choi from the Korbit Research Center argued that the domestic crypto market has been experiencing “serious liquidity problems” due to the absence of a formal market maker system, leading to price discrepancies and high volatility. The paper cited the Kimchi premium as an example of inefficiency in South Korea’s crypto market.Related: South Korea drops Travel Rule threshold for crypto transfersThe potential introduction of a market-making system comes as South Korea works to establish a broader regulatory framework for its crypto industry. The FSC said in July that it planned to introduce a consolidated Digital Asset Basic Act covering stablecoins and the broader crypto market, including rules for digital asset businesses, exchanges, disclosures and internal controls.However, lawmakers have yet to settle several key aspects of the legislation, including rules governing won-denominated stablecoin issuers.Magazine: THORChain under fire over Bitget, ETH evolves beyond blockchain: Hodler’s Digest

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Zano has rolled back approximately a month of blockchain history after a vulnerability involving Gateway Addresses allowed unauthorized ZANO and Freedom Dollar to enter circulation, according to its core team. The Zano blockchain has been restarted at block 3,833,000, immediately before Hard Fork 6, which introduced the affected feature. The recovery requires participating nodes, miners, stakers, exchanges and other services to adopt the update, the team said Sunday. The rollback invalidates a month of legitimate transactions along with the unauthorized tokens, meaning transactions made during that period will no longer appear on the recovered chain. It also cannot reverse payments already settled on other blockchains. The team said it is working to account for any losses and will publish a reimbursement and claims process. “Doing nothing meant unauthorized ZANO and fUSD in circulation without limit, diluting every holder and breaking the most basic promise a currency makes: a fixed supply,” said Zano’s head of marketing and growth Quinten van Welzen. “It would also tell every future attacker that exploited coins get to keep their value. No project survives that.” Zano identifies Gateway Address exploit Zano has not released a post-mortem at the time of publication, but confirmed the issue came from Gateway Addresses, a feature developed to make it easier for bridges, exchanges and payment services to integrate with Zano by letting them manage funds through a single account-style balance (similar to other blockchains). Before Gateway Addresses, Zano’s ordinary wallets tracked funds as separate transaction outputs (UTXOs), rather than a single account balance. Exchanges and other services had to scan the blockchain to identify incoming payments, track those outputs and select which ones to spend when processing withdrawals.Zano’s blockchain explorer shows the rollback taking place on Sunday. Source: Zano ExplorerZano launched in May 2019 as a layer-1 blockchain focused on private payments. Its standard private transactions conceal senders, receivers, transferred amounts and asset types. While it has a native token, ZANO, the blockchain also allows users to deploy and mint custom digital assets. Freedom Dollar (fUSD) is one such token that operates on the Zano blockchain. Related: Bitget CEO suspects North Korea behind $352M hack, citing IP clues “Restarting the chain from before Hard Fork 6 costs a month of history, and it costs trust, which we’ll have to earn back,” said van Welzen. “But it restores the supply everyone signed up for, and it leaves a path to rebuild. Which is better than 7 years of hard work left to die. We know it hurts. But not doing it would have hurt more.”Magazine: THORChain under fire over Bitget, ETH evolves beyond blockchain: Hodler’s Digest

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.