Introduction: Crypto Regulation in South Korea Under Fire
Cryptocurrency debate South Korea is intensifying after Lee Eok-won, nominee for chairman of the Financial Services Commission (FSC), dismissed digital assets as speculative and “without intrinsic value.”
His comments come at a time when crypto adoption is surging across the nation, especially among younger generations desperate for financial opportunity.
Lee Eok-won Labels Crypto “Valueless”
In a written response to lawmakers ahead of his confirmation hearing, Lee argued that:
- Crypto has extreme price volatility
- Digital assets lack a monetary function
- Virtual assets have no intrinsic value, unlike traditional products such as deposits and securities
He stressed that this volatility makes cryptocurrencies unsuitable as a store of value or medium of exchange, a stance that has sparked outrage in South Korea’s thriving crypto sector.
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Industry Pushback Against FSC Nominee’s Stance
The crypto industry was quick to respond. A local crypto company executive said it was “wrong” to claim Bitcoin and other digital assets lack value, noting that U.S. corporations and global financial institutions now hold Bitcoin as a strategic reserve.
He added that Bitcoin’s digital utility, blockchain-backed security, and transferability prove its worth.
Youth-Driven Crypto Boom in South Korea
Despite Lee’s criticism, crypto adoption is at record highs:
- Over 16 million South Koreans now use crypto exchanges (30% of the population).
- Many young investors see crypto not only as a financial opportunity, but also as a lifeline amid soaring living costs and limited career prospects.
- Analysts argue that this adoption is less about belief in Web3 ideals and more about financial survival and desperation.
Regulatory Future: ETFs, Stablecoins, and Pension Funds
Lee has taken a hardline stance on pension funds investing in crypto, warning that exposing retirement savings to volatility could destabilize financial security.
However, on crypto ETFs, Lee acknowledged both “expectations and concerns,” promising that the FSC will monitor global regulatory trends before moving forward.
Interestingly, Lee struck a more balanced tone on stablecoins, pledging to support innovation while safeguarding investors. This follows recent news that eight major South Korean banks are exploring a won-backed stablecoin in line with President Lee Jae-myung’s pro-crypto campaign promises.
Final Thoughts: A Clash Between Regulators and Reality
Lee Eok-won’s nomination signals a cautious, even hostile, regulatory future for crypto in South Korea.
But with millions of citizens—and especially young people—already invested, the government faces a growing challenge: balancing regulation with financial innovation.
The outcome could define South Korea’s role in the global blockchain economy for years to come.
