U.S. Treasury yields retreat from the highest levels in decades, while bitcoin holds above $64,000.
A two-minute price shock in a Hyperliquid market tied to South Korea’s SK Hynix has put the mechanics and oversight of equity-linked perpetuals under scrutiny.
SKHX, a TradeXYZ-operated perpetual on Hyperliquid that tracks the US dollar value of one Korean SK Hynix share, briefly sank to $927 during South Korea’s pre-market window before recovering within roughly two minutes, according to local media.
A later DefiLlama snapshot put open interest at $407 million, down 20% over 24 hours, while 24-hour trading volume reached $959 million. Open interest measures the rolling value of outstanding positions, incorporating changes in both position size and price.
The underlying market was already under severe pressure. South Korea’s KOSPI closed 10.84% lower after a 20-minute marketwide circuit breaker, while SK Hynix’s Korean shares finished down 14.65% at 1.55 million won, Yonhap reported.
TradeXYZ’s contract specification defines SKHX as the dollar value of one SK Hynix common share, calculated by converting the Korean share price at the prevailing USD/KRW rate. TradeXYZ documents an external-pricing window from 8:00 a.m. to 8:50 a.m. Korean time. SKHX is separate from the company’s US-listed depositary receipt and from tokenized shares.
From price input to liquidation
Hyperliquid’s HIP-3 specification gives a market deployer control over its oracle definition, oracle prices, leverage limits and settlement. The deployed market uses HyperCore’s order books and margin system.
TradeXYZ says its relayers compute and transmit the XYZ market’s oracle, mark and external prices about every three seconds. HyperCore handles matching, margining, liquidations and auto-deleveraging. In the documented design, TradeXYZ supplies the bespoke price inputs and HyperCore applies its risk machinery to the resulting mark.
The HIP-3 deployer API accepts an oracle price, an external-perpetual price and as many as two deployer-supplied mark-price inputs. HyperCore contributes a local price derived from the best bid, best offer and latest trade. TradeXYZ says the final mark is the median of the oracle, a smoothed oracle-to-market difference, and that local order-book price.
The rulebook shows how SKHX pricing is meant to work. The plunge to $927 is still a black box, with the raw observations and mark-price ingredients absent from the public record. DefiLlama names Pyth Lazer as the oracle provider. TradeXYZ says its relayer and updater carry prices into HyperCore. The incident-level handoff between those systems remains the missing piece.
BlockMedia reported at 18:41 Korean time that Hyperliquid said TradeXYZ was investigating and planned an update after reaching a conclusion. At that cutoff, the reviewed sources contained no official incident report or event-specific account of compensation, insurance impact, a halt, a cap change, or slashing.
HIP-3’s allocation of controls is clear even as responsibility for this price shock remains open: the deployer operates the oracle settings, and HyperCore executes the market and risk functions. TradeXYZ’s findings will determine whether the episode reflected the published design under extreme conditions or a price-feed safeguard that needs revision.
Mirae Asset reportedly plans to use the South Korean crypto exchange as a hub for tokenized assets, stablecoins and digital finance.
South Korea’s financial authorities investigated more than 40 cases of unfair trading, including market manipulation and fraudulent crypto trading, in the last two years.
According to an X post by Financial Services Commission Chair Lee Eog-won, 30 of them reported or referred to investigative agencies, identifying 25 suspects since the Virtual Asset User Protection Act took effect in July 2024.
Lee said the average unlawful gains were around 1.4 billion Korean won ($940,000).
“Today marks the second anniversary of the enactment of the ‘Virtual Asset User Protection Act…’ It was a meaningful time that brought the virtual asset market, which was outside the institutional framework at the time, into the fold of the law and created an opportunity to establish a user protection system for virtual assets,” said Lee.
Related: South Korea to bring digital assets under new state asset management system
The Virtual Asset User Protection Act is designed to protect users who buy and store crypto assets with virtual asset service providers.
VASPs are legally required to separate user deposits and virtual assets from their own corporate holdings, holding client deposits in banks.
The legislation also targets illicit activities such as insider trading, wash trading and market manipulation, enhancing the Financial Services Commission (FSC) authority to supervise and inspect VASPs.
“We will continue to enhance market surveillance investigation and monitoring systems based on AI, and proactively respond to high-risk areas,” Lee added.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
- South Korean prosecutors charge 5 people in a CATFI memecoin rug pull case.
- About 256 investors lost roughly $650K after the CATFI token crashed.
- CATFI token surged 1,000x before liquidity was drained and the price collapsed.
South Korean prosecutors have arrested and charged a group of individuals linked to the Solana-based CATFI memecoin over an alleged decentralised exchange (DEX) rug pull.
The case marks the country’s first formal criminal action targeting a memecoin scam that unfolded entirely through a decentralised trading environment.
According to a local news outlet, authorities say the operation affected hundreds of retail investors and generated substantial illicit gains before collapsing after a rapid price spike and liquidity drain.
How the CATFI memecoin scheme unfolded
The CATFI token was launched on Solana and traded primarily through decentralised platforms, including Pump.fun.
Investigators allege that the operators positioned the token as a high-potential memecoin and used aggressive online promotion to attract early buyers.
A key figure in the promotion reportedly used the alias “Eth Father,” presenting themselves as a credible community leader.
This identity was used across social channels to build trust and encourage early participation in the token.
Once liquidity and trading activity increased, prosecutors say the operators engaged in coordinated trading behaviour designed to simulate organic demand.
This included wallet splitting and wash trading patterns that created the appearance of active market interest.
At its peak, CATFI experienced a dramatic surge, reportedly increasing by more than 1,000 times in value within a short period.
That rapid rise was followed by a sudden collapse after liquidity was withdrawn and large holdings were sold off, a structure consistent with what authorities describe as a classic rug pull.
Arrests, charges, and financial impact
The Seoul Southern District Prosecutors’ Office Virtual Asset Crime unit led the investigation.
Officials confirmed that two primary suspects were arrested, while five individuals in total were charged in connection with the scheme.
Additional suspects are also being investigated for allegedly helping key figures evade arrest during the inquiry.
The case is being prosecuted under South Korea’s Virtual Asset User Protection Act, which was recently introduced to address fraud and manipulation in the digital asset market.
Authorities estimate that around 256 investors were directly affected by the CATFI collapse.
Total losses are reported at approximately 900 million won, which is about 650,000 US dollars based on prevailing exchange rates.
Investigators also identified roughly 400 million won, or about 260,000 US dollars, in illicit profits linked to the scheme.
The investigation suggests that the operators extracted value through early liquidity positions and coordinated sell-offs, leaving late participants exposed to the sharp price reversal.
Why this case is significant for South Korea’s crypto enforcement
This is the first known case in South Korea where prosecutors have pursued criminal charges specifically tied to a DEX-based memecoin rug pull.
Unlike earlier enforcement actions that focused mainly on centralised exchanges or structured investment fraud, this case extends legal scrutiny directly into decentralised trading environments.
The prosecution has made it clear that the use of decentralised platforms does not shield individuals from criminal responsibility.
By applying the Virtual Asset User Protection Act to on-chain activity, authorities are signalling that token creators and promoters can be held accountable even when no centralised intermediary is involved.
The CATFI memecoin case also highlights how quickly memecoin ecosystems can amplify both gains and losses.
The token’s reported 1,000x surge drew in a large number of retail traders, but the subsequent collapse wiped out those gains almost immediately after liquidity was removed.
With 256 confirmed victims and losses reaching hundreds of millions of won, regulators appear to be treating the incident as more than a simple market failure.
Instead, it is being positioned as a coordinated financial fraud operation built around token manipulation and misleading promotion.
The outcome of this case is likely to influence how future memecoin projects are launched and monitored in South Korea.
Prosecutors are now actively tracing wallet activity, promotional networks, and liquidity movements tied to token launches on decentralised exchanges.
South Korea’s KOSPI surged 7% on Thursday, snapping a multi-day losing streak as Asia-Pacific markets tracked Wall Street’s gains.
The benchmark had fallen 9.35% after hitting an all-time high above 8,000 last Friday.
KOSPI Jumps 7% as Iran Thaw and Samsung Truce Spark Rebound
Earlier-week declines came as President Donald Trump signaled possible US strikes on Iran, rattling investors. Sentiment has since reversed, with Trump saying Washington is now in the “final stages” of negotiations with Tehran.
In addition, Samsung Electronics and its worker union reached a last-minute wage agreement late Wednesday. The deal suspended an 18-day strike scheduled to begin Thursday.
Samsung shares climbed more than 6%, while memory rival SK Hynix jumped 11%. Semiconductor names also lifted after Nvidia’s latest earnings showed revenue climbing 85% year-on-year to $81.62 billion.
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Rally Now One of Asia’s Steepest
The KOSPI has tripled in less than 18 months. According to the Financial Times, the pace beats the Nasdaq Composite’s dotcom-era climb by roughly six months.
The rally is fueled largely by the country’s two heaviest-weighted listed companies, Samsung Electronics and SK Hynix. The pair now make up a record 42% of the benchmark, with Samsung up roughly 130% this year and SK Hynix climbing nearly 170%.
Surging memory-chip demand from AI hyperscalers has anchored the run. Notably, Goldman Sachs, Citigroup, and JPMorgan have raised their year-end KOSPI targets in recent weeks.
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Make preferred on
South Korea’s Kbank has signed a strategic partnership with Ripple to test blockchain-based overseas remittances, placing a bank with a central role in Upbit’s KRW account access beside one of crypto’s longest-running payments infrastructure firms.
Local reports describe the work as a technical verification, or proof-of-concept, focused on whether Ripple’s infrastructure can improve the speed, cost, and transparency of overseas remittances. ZDNet Korea separately described the test as part of a phased push around bank-linked overseas remittance infrastructure.
For now, the commercial pieces remain open: launch date, customer access, fees, live volume, and the exact settlement asset.
Kbank already sits inside South Korea’s crypto market through Upbit’s real-name account system. Its Ripple pilot, therefore, lands as more than a remittance experiment: it tests whether bank-side crypto infrastructure can move from exchange access toward ordinary cross-border payments while the product design and rulebook remain unfinished.
What Kbank and Ripple are testing
The Kbank-Ripple agreement points to bank integration rather than a standalone crypto app. Local reports said Kbank CEO Choi Woo-hyung and Ripple APAC head Fiona Murray attended a signing ceremony at Kbank’s Seoul headquarters, with the companies discussing a Ripple digital-wallet proof-of-concept, support for Kbank’s overseas remittance model, and broader digital-asset cooperation.
The sequence starts with a separate app-based remittance structure. The next step virtually links customer accounts and internal systems to test remittance stability, checking whether blockchain remittance rails can be mapped onto account and operations layers that resemble the systems a regulated bank would actually use.
That second phase also reportedly tests on-chain transfers involving corridors such as the UAE and Thailand. The corridor detail makes the PoC more operationally specific than a generic partnership announcement while keeping the commercial model open.
Palisade brings the wallet and custody layer into the test. Global Economic said the second phase uses or evaluates Ripple’s SaaS-based digital wallet Palisade, while Ripple’s own Palisade acquisition announcement describes the platform as wallet-as-a-service and custody tooling with features aimed at institutional digital-asset operations.
That makes the test a wallet and key-management exercise as much as a transfer-speed exercise. Production deployment by Kbank remains unannounced.
The technical focus is still meaningful. A bank remittance product has to solve compliance, custody, account linkage, settlement, and broader regulatory requirements. The PoC appears to test parts of that stack, while the full commercial design remains open.
Why Upbit changes the stakes
Kbank’s role in Upbit’s fiat access gives the Ripple test its market-structure relevance. The bank was moving to extend its real-name deposit and withdrawal account partnership with Upbit through October 2026, according to ChosunBiz.
Upbit’s own real-name account verification guide says deposit and withdrawal account verification is possible only with Kbank.
Taken together, the partnership report and Upbit’s guide make Kbank the bank behind Upbit’s KRW real-name deposit and withdrawal account verification rail. They do not show Upbit participating in the Ripple PoC or Kbank running the test on Upbit’s behalf.
The size of the Upbit relationship explains why the context has force. Upbit-linked funds accounted for about 24% of Kbank’s 30.4 trillion won deposit balance as of the third quarter of 2025, according to Korea JoongAng Daily.
The same report quoted Choi discussing Kbank’s need to reduce reliance on Upbit while positioning stablecoins and cross-border payments as future opportunities.
Kbank’s crypto-linked banking role has been built around exchange access. The Ripple test examines whether similar bank-side plumbing can be used for payments.
The first use case is account access for trading. The next possible use case is cross-border money movement. Between those two sits the unresolved question of regulation.
That context should not be stretched into Upbit participation. Upbit explains why Kbank’s banking role matters to South Korea’s crypto rails; the Ripple agreement remains a Kbank-side remittance PoC.
CryptoSlate’s prior coverage helps define the surrounding terrain. A June 2025 article covered South Korean banks pursuing a won-backed stablecoin push, while an April 2026 CryptoSlate report on Ripple’s RLUSD in Japan showed how bank trust can shape Asian stablecoin adoption.
Regulation keeps the test provisional
South Korea’s bank-led stablecoin debate gives the remittance test a policy edge. The Kbank pilot is already being tied to South Korea’s stablecoin rulemaking debate, while Seoul Economic Daily reported that delayed digital-asset legislation has kept some Korean blockchain and remittance infrastructure from moving into actual operations.
Banks can test the mechanics before they know the final rulebook. They can examine wallet architecture, account linkage, compliance controls, and cross-border flows. They can also build optionality without committing to a product launch.
Note: Kbank, the South Korean internet-only bank in the Ripple partnership, should be kept separate from Thailand’s KASIKORNBANK, often branded KBank.
KASIKORNBANK has appeared in related Korea-Thailand digital-asset remittance discussions, including a February cooperation announcement with Orbix and BPMG. The connection is corridor context and naming clarity, while the South Korean Kbank and Thailand’s KASIKORNBANK remain separate institutions.
The practical split is straightforward: what the pilot tests, what remains undecided, and why Kbank’s Upbit rail gives the work market weight.
| Confirmed | Still open | Operational implication |
|---|---|---|
| Kbank and Ripple signed a strategic partnership for remittance technical verification. | No production launch date or customer rollout has been confirmed. | The work remains a bank-side PoC before customer rollout. |
| The current phase virtually links customer accounts and internal systems and tests UAE/Thailand on-chain transfers. | The exact settlement asset, fee model, and live transaction volume remain undisclosed. | The test targets bank integration, but the commercial model is still undefined. |
| Upbit account verification for deposits and withdrawals is available only with Kbank, according to Upbit’s guide. | Upbit has not been identified as a participant in the Ripple PoC. | Kbank’s exchange-rail position gives the test relevance while exchange integration remains unsupported. |
| South Korea is still working through stablecoin and digital-asset payment rules. | The final rule set for bank-led digital remittances remains unsettled. | Regulation is a key gate between technical readiness and commercial launch. |
The next test is commercial proof
Kbank is now sitting between two roles. One is already visible: banking access for Upbit’s KRW deposit and withdrawal verification.
The other is being tested: blockchain-based overseas remittances that connect with bank accounts and internal systems.
That bridge has strategic value because South Korea’s crypto market already depends on tightly controlled bank-account rails. If a bank tied to those rails can also make blockchain remittances operational, the boundary between exchange access and payment infrastructure becomes less fixed.
The same compliance-heavy banking layer could become a place where crypto-linked infrastructure moves from trading access into cross-border money movement.
For now, the PoC covers testing, corridors, account-system simulation, and Palisade evaluation. It does not yet provide the commercial pieces that would turn the work into a live remittance business.
The next threshold is concrete: a named product, a live customer flow, a settlement asset, a fee model, and regulatory clearance.
Until those pieces arrive, Kbank’s Ripple partnership is best read as a readiness test with unusually important surroundings. It shows that one of South Korea’s key crypto-linked banking rails is examining the payments infrastructure.
It also shows how much still depends on regulation before a technical pilot can become a real remittance business.
- Shin Hung-song has left his Bank for International Settlements role.
- South Korean tech firms await green light to launch stablecoins.
- Shin has warned South Korean stablecoins may spark capital outflow.
South Korea’s incoming central bank chief is a crypto-sceptic who could derail industry leaders’ and lawmakers’ hopes of launching won-pegged stablecoins.
So say media outlets in the East Asian nation, after President Lee Jae-myung nominated the Bank for International Settlements’ Monetary Economy Bureau chief Shin Hung-song for the governorship of the Bank of Korea on March 22.
“Won-denominated stablecoins are a shortcut to effectively neutralising existing foreign exchange regulations,” Shin said in August, South Korean news agency Yonhap reported. “By exchanging stablecoins for dollar-denominated cryptocurrencies on blockchain protocols, [South Korea] could open a channel for capital outflow.”
Some of South Korea’s biggest, stablecoin-keen firms have been left in the lurch for months as government officials talk up imminent stablecoin legislative developments.
Pre-election promises
Shin “will step back from his duties with immediate effect” following his selection as BOK nominee, the BIS wrote in a statement.
Observers are waiting to see if Shin will change his tune on stablecoins after taking the helm at the BOK, Yonhap wrote.
Lee made won-pegged stablecoin issuance a key manifesto issue ahead of his election last year. But so far, the BOK has resolutely stood in the way of his governing party’s attempts to launch legislation.
Unnamed industry insiders said it was “a matter of great interest” to see what stance he would take on stablecoins.
A BIS report, published last year, warned that “stablecoins do not fulfil the role of stable currency.”
“Due to a lack of regulation, they could pose risks to financial stability and monetary sovereignty,” the report’s authors wrote.
South Korea’s top tech firms want to issue won-denominated coins to help them boost cross-border trade.
But the BOK says that allowing them to do so could undermine its efforts to control fiscal policy.
Crypto market movers
- Bitcoin is trading at $68,306 on Sunday, down by over 3% in the past 24 hours.
- Ethereum prices have fallen to $2,073 in the past day, a 24-hour drop of almost 4%.
What we’re reading
Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.
South Korea’s government and ruling party have reportedly agreed on a plan to cap the ownership stakes of major shareholders in domestic crypto exchanges at 20%.
The Democratic Party of Korea’s digital asset task force and the Financial Services Commission (FSC) agreed to set the maximum shareholding limit at 20% after discussions, according to a Wednesday report by local media outlet Herald Economy.
However, regulators may allow exceptions of up to 34% for new businesses through an enforcement decree. The threshold references the Commercial Act’s 33.3% veto threshold in general shareholders’ meetings, per the report.
Under the proposal, exchanges would reportedly have three years from the law’s enforcement to adjust their ownership structures. Smaller exchanges may receive an additional three-year grace period. Larger platforms like Upbit and Bithumb, which together control roughly 90% of the local market, would be required to reduce major shareholder stakes within the initial three-year period.
Related: Korea halts trading as key indexes drop 10% on Middle East crisis
Major Korean exchanges exceed proposed ownership cap
Current ownership levels across South Korea’s major exchanges exceed the proposed cap. Upbit chairman Song Chi-hyung holds about 25.52%, while Bithumb Holdings owns roughly 73.56% of Bithumb. Coinone chairman Cha Myung-hoon controls about 53.44%, Mirae Asset Consulting is set to hold around 92.06% of Korbit following an acquisition, and Binance owns about 67.45% of GOPAX.
The proposal, which has received some backing among regulators, faces a lengthy legislative process. A member of the National Assembly is expected to introduce the bill, though the sponsor has not yet been determined. Passage may prove challenging, as some lawmakers, including members of the ruling party, have raised concerns about restricting ownership in the sector.
An industry insider warned that the measure could have broader implications for competition. “This is unprecedented worldwide and has low global consistency. If it is excessively introduced, it could have serious negative effects such as limited competition, slowed innovation, and strengthened barriers to entry,” they reportedly told the outlet.
Related: South Korea orders cross-agency probe after repeated crypto custody failures
South Korea tightens crypto licensing rules
In late January, South Korea’s National Assembly approved changes to the country’s crypto licensing framework, introducing stricter entry requirements for virtual asset service providers (VASPs). The updated rules allow authorities to examine executives and major shareholders for a wider range of potential violations, including drug trafficking, tax evasion, fair-trade breaches and serious economic crimes.
In February, Democratic Party lawmaker Kim Seung-won also announced plans to draft amendments to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users that would mandate disclosure from individuals who provide investment advice or encourage trading of financial products or virtual assets.
Magazine: Bitcoin may take 7 years to upgrade to post-quantum — BIP-360 co-author
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
South Korea’s long-awaited Digital Asset Basic Act (DABA), a sweeping framework meant to govern crypto trading and issuance in one of Asia’s most active digital asset markets, has been delayed amid disagreements among regulators over stablecoin issuance.
The most significant disagreement centers on who should have the legal authority to issue KRW-pegged stablecoins, according to a Korea Tech Desk article. The Bank of Korea (BOK) argued that only banks with majority (51%) ownership should be permitted to issue stablecoins. It said financial institutions are already subject to stringent solvency and anti-money-laundering requirements and therefore the only ones in position to ensure stability and protect the financial system.
The Financial Services Commission (FSC), which oversees financial policy-making, is more flexible. It acknowledged the need for stability, but warned that a strict “51% rule” could stifle competition and innovation, blocking fintech firms with the technical expertise to build scalable blockchain infrastructure from participating, according to the report.
The FSC cited the European Union’s Markets in Crypto-Assets regulation, in which most licensed stablecoin issuers are digital asset firms rather than banks. It also pointed to Japan’s fintech-led yen stablecoin projects as an example of regulated innovation.
The deadlock highlights a broader global debate over whether banks or fintech firms should control fiat-backed stablecoins, a decision that could shape competition, innovation and monetary oversight.
The ruling Democratic Party of Korea (DPK) also opposes the BOK’s 51% rule, a Korea Times article reported last week.
“A majority of participating experts voiced concerns about the BOK’s proposal, with many questioning whether such a framework could deliver innovation or generate strong network effects,” DPK lawmaker Ahn Do-geol said. “It is also hard to find global legislative precedents in which institutions from a specific sector are required to hold a 51%.”
He said the BOK’s stability concerns could be mitigated through regulatory and technological measures, a view the lawmaker added, “is broadly shared among policy advisors”.
Foreign-issued stablecoins are also another key sticking point. According to an earlier draft of the government proposal prepared by the FSC, foreign-issued stablecoins would be allowed in South Korea if they are licensed and have a branch or subsidiary in the country. That would require issuers such as Circle, which issues USDC, the world’s second-largest stablecoin, to establish a local presence for the token to be legally used in the country.
The regulatory deadlock is expected to delay the bill’s passage until at least January, with full implementation now unlikely before 2026, according to AInvest. South Korea’s digital assets act marks a significant shift in a country that for nine years banned crypto, a stance that its financial watchdog began to soften earlier this year.
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