South Korean FSC head nominee faces backlash after denouncing crypto
Lee Eok-won, the nominee to head South Korea’s Financial Services Commission, drew heavy criticism this week after dismissing crypto as missing any actual worth in his written testimony forward of affirmation hearings, native media reported on Sept. 1.
Lee stated digital belongings don’t possess intrinsic price in the identical manner as equities or financial institution deposits, and argued that their value swings undermine their potential to behave as cash. He additional said that the acute volatility skilled by digital belongings makes them unsuitable as a retailer of worth or as a medium of trade.
Lee’s place is according to the federal government’s view that digital belongings are neither authorized tender nor monetary merchandise below the monetary regulatory regime.
The FSC chair nominee warned in opposition to permitting retirement and pension funds to put money into the sector however expressed openness to regulating stablecoins, noting that they may very well be managed with safeguards whereas leaving room for innovation.
Industry pushback
The nation’s blockchain sector rejected the remarks, with many within the business arguing that the assertion ignores the income and adoption being generated throughout the business.
Since 2022, crypto adoption in South Korea has surged from about 9.7 million buyers to greater than 16 million by early 2025, representing over 30% of the inhabitants and rising greater than 60% in simply over two years.
Trading exercise on native exchanges has at instances exceeded inventory market volumes, and complete holdings have climbed above 102 trillion KRW ($70 billion), highlighting how digital belongings have quickly turn into a mainstream funding alternative for South Koreans.
An analyst at Xangle, an area information agency, accused Lee of counting on outdated arguments as soon as frequent amongst conventional finance leaders.
He pointed to current token buybacks and income streams from platforms like Hyperliquid, Tron, and Ethena as proof of worth creation similar to company inventory buybacks.
Policy warning vs. retail demand
South Korean regulators have strengthened restrictions in current months as retail curiosity continues to climb within the nation.
The Financial Supervisory Service suggested home asset managers to cut back holdings in crypto-related shares, whereas the FSC ordered exchanges to cease offering lending companies backed by digital belongings or fiat deposits.
Despite the tighter stance, retail enthusiasm for crypto continues to climb. Investors bought off a whole lot of hundreds of thousands of {dollars}’ price of Tesla inventory in August, the most important disposal since early final yr, whereas directing funds into crypto proxies like BitMINE, which not too long ago grew to become the most important Ethereum holder.
Data additionally confirmed a steep decline in South Korean purchases of main U.S. tech shares in contrast with earlier this yr.
The contrasting positions between regulators and buyers go away open questions on how President Lee Jae-myung’s administration will balance caution with the public’s growing appetite for digital belongings.
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