Lee Eok-won, nominated as head of South Korea's Financial Services Commission, is causing concern in the country's crypto industry with his views on the volatility and lack of value of cryptocurrencies.
Skepticism of Lee Eok-won on Cryptocurrencies
Lee Eok-won perceives cryptocurrencies as lacking intrinsic value, distinguishing them from traditional financial products like deposits and securities. He stated that due to their high volatility, cryptocurrencies cannot fulfill essential functions of currency, such as storing value and serving as a means of exchange. In his written response to the National Assembly’s Political Affairs Committee, he also expressed concerns regarding investments in virtual assets for pension and retirement accounts.
Crypto Industry's Response to Lee
The crypto industry has reacted critically to Lee’s statements on the lack of intrinsic value associated with virtual assets. Local reports quoted an official from a blockchain technology company stating that claiming there is no intrinsic value is inappropriate when major U.S. and global corporations use virtual assets as strategic reserves. He expressed dissatisfaction, suggesting that someone should be held accountable for the losses domestic investors face and the resulting outflow of the ecosystem.
Necessary Changes in Regulation
Many industry participants believe a shift in regulatory approach is necessary to foster development in the crypto sector. Some have proposed creating a separate organization for virtual asset regulation, as the Financial Services Commission has focused extensively on regulation instead of encouraging innovation.
Lee Eok-won’s nomination raises serious concerns about the future of the crypto industry in South Korea, as his skeptical view on virtual assets may hinder innovation and sector growth.
