Lee Eok-won: “The process behind Lucentblock’s STO preliminary approval rejection was fair; I empathize with the frustration”

[Financial News] Financial Services Commission Chair Lee Eok-won said at a National Assembly audit that the process for Lucentblock’s rejection in the preliminary approval review for an over-the-counter exchange for fractional investment (STO) was fair, while expressing empathy for the frustration the innovative entrepreneur may have felt.
Appearing on the 8th at the National Assembly’s audit of the Financial Services Commission, held by the National Policy Committee in Yeouido, Seoul, Chair Lee responded to Rep. Min Byeong-deok of the Democratic Party of Korea, who had raised concerns about Lucentblock’s rejection process. “The process was fair, and the approval method was sufficiently disclosed after gathering opinions from the industry,” he said.
Since its founding in 2018, Lucentblock had been designated an innovative financial service by the FSC and operated SOU, a real estate fractional-investment exchange. However, it was rejected in the preliminary approval process for an over-the-counter exchange for fractional investment, finalized at the FSC’s regular meeting in February. KDX and the NXT Consortium, with the Korea Exchange and Nextrade participating in them, respectively, both passed preliminary approval.
Rep. Min pointed out, “Lucentblock is a startup that opened up the fractional-investment market without a single incident, yet it was rejected when it came to institutionalization and the approval review,” adding, “Large institutions with no operating experience passed.”
He also criticized the failure to properly apply Article 21 of the Special Act on Support for Financial Innovation, which stipulates that when an innovative financial business operator applies for formal authorization, the Innovative Financial Services Review Committee may present its views to the FSC and other relevant bodies on whether the authorization requirements have been met, taking into account the results of demonstration projects and other factors.
Chair Lee made clear that Article 21 of the Special Act is not mandatory and said there had been no problem with the review itself. However, he added, “I empathize with the frustration the innovative entrepreneur may have felt.”
Following questions from Rep. Cho Jung-hoon of the People Power Party and a request from Lucentblock CEO Heo Se-young, who appeared as a witness, for another chance to undergo the review, Chair Lee said, “I’ll look at the situation and see whether there’s anything more we can approve.”

[email protected] Im Sang-hyeok Reporter