Nikolas Sargeant
South Korea's Financial Services Commission (FSC) chief nominee Lee Eok-won has sparked significant controversy after declaring that cryptocurrencies have no intrinsic value. In written responses submitted ahead of his confirmation hearing, Lee stated that crypto has "extreme price volatility, lacks monetary function" and possesses "no intrinsic value." The comments have drawn sharp criticism from South Korea's crypto industry, which views his stance as regressive amid growing institutional adoption.
Lee argued that cryptocurrencies differ fundamentally from traditional financial products such as deposits and equities, emphasizing that virtual assets lack the intrinsic value found in conventional investments. His position centers on the argument that cryptocurrency volatility prevents digital assets from fulfilling essential currency functions, including serving as a reliable store of value or medium of exchange. The nominee's stance comes at a time when South Korea's regulatory framework for digital assets remains in development.
The timing of Lee's remarks is particularly significant given the surging popularity of cryptocurrency investments among South Korean youth. Despite his concerns about crypto's volatility and lack of intrinsic value, cryptocurrencies continue to attract the country's younger demographic, leaving the nominee worried that investors don't fully understand the risks they're taking. This generational divide highlights the challenge facing South Korean policymakers as they balance regulatory oversight with growing public interest in digital assets.
The crypto industry's backlash against Lee's comments reflects broader tensions between traditional financial regulators and the emerging digital asset sector in South Korea. Industry players have characterized his views as outdated, particularly as major global financial institutions increasingly embrace cryptocurrency investments. The controversy surrounding Lee's nomination underscores the ongoing debate about how South Korea should approach crypto regulation while maintaining its position as a technology-forward nation.
Korea's Post-Election Crypto Advancement
Lee Eok-won's critical stance comes amid South Korea's dramatic pivot toward cryptocurrency-friendly policies following the recent presidential election. Opposition leader Lee Jae-myung's decisive electoral victory has ushered in one of the most ambitious national digital asset strategies globally, creating a stark contrast with the FSC nominee's traditional regulatory approach.
The new administration has already begun implementing concrete pro-crypto measures. South Korea's central bank launched a dedicated Virtual Asset Division to monitor the crypto market and lead discussions on Korean won-pegged stablecoins. The Bank of Korea's move signals institutional recognition of digital assets' growing importance, with cryptocurrency transactions totaling $42 billion in the first quarter of 2025 in USD-backed stablecoins alone.
President Lee Jae-myung's comprehensive cryptocurrency agenda includes authorizing South Korea's massive $884 billion national pension fund to invest in Bitcoin and launching a Korean won-backed stablecoin. The administration has also submitted a roadmap for spot cryptocurrency ETF approvals and proposed extending startup benefits to crypto firms, allowing them to register as "venture companies" with access to government tax incentives.
