Lee Eok-won, nominated to head South Korea’s Financial Services Commission (FSC), has drawn sharp reactions from the domestic blockchain industry after voicing doubts over the legitimacy of digital assets, as per local media reports. In written responses submitted to lawmakers ahead of his confirmation hearing, Lee argued that crypto carries “extreme price volatility,” lacks the functions of money, and has “no intrinsic value.”
Lee’s scepticism towards crypto further extends to pension funds. He cautioned against using retirement savings for crypto investment, citing high risk and speculation. On crypto exchange-traded funds, he acknowledged both “expectations and concerns,” adding that the FSC would study global regulatory approaches before finalising its stance.
Since 2022, the number of South Koreans investing in digital assets has expanded from about 9.7 million to over 16 million by early 2025. The total represents more than 30% of the national population, with holdings exceeding 102 trillion won ($70 billion).
On several occasions, volumes on crypto exchanges have outpaced those on the domestic stock market. In July, in a positive development, South Korea’s Ministry of SMEs and Startups announced that it has plans to remove restrictions on crypto-related firms from qualifying as venture companies.
Despite the surge in retail interest, regulators have tightened rules. The Financial Supervisory Service (FSC) has advised asset managers to cut exposure to crypto-related equities, while the FSC has instructed exchanges to halt lending products that use either fiat deposits or digital assets as collateral.
Investor behaviour has also shifted. Recent data have shown South Koreans reducing their exposure to U.S. tech shares, including the largest selloff of Tesla stock since early last year, while directing capital toward crypto-linked vehicles like BitMINE, which has emerged as the largest holder of Ethereum.
