Lucentblock rebuts FSC assessment criteria: "The 51% stake claim is not true"

Lucentblock, which failed to pass the preliminary licensing review for an over-the-counter exchange for fractional investing, raised questions over the Financial Services Commission’s (FSC) assessment.

On the 13th (Korea time), Heo Se-young, CEO of Lucentblock, said in a statement that the FSC’s remark that “the largest shareholder stake in the Lucentblock consortium amounts to 51%” is “not true.”

Earlier, at a regular meeting held around 2 p.m. that day, the FSC granted preliminary licenses for an OTC exchange to the “KDX consortium” and the “NXT consortium.”

Lucentblock received the lowest score in the assessment, and the largest shareholder stake became an issue during the evaluation. The FSC explained that “(the Lucentblock consortium) has a 51% stake held by the largest shareholder and related parties, making it difficult to view as a consortium in substance,” adding that it “has the character of a personal company of an individual major shareholder.”

In response, Heo said, “The controversial second-largest shareholder, the ‘personal investment association,’ is an officially recognized investment vehicle accredited by the Ministry of SMEs and Startups, and it contains no individual stake whatsoever.”

The company also said it cannot accept the FSC’s assessment that it is a late entrant to the fractional investing platform market. Lucentblock argued that it is “not a business that entered the fractional investing market late, but rather a company that established the standard for regulated tokenized securities (STO),” adding that it is “the first operator to implement an STO distribution structure based on electronically registered beneficial certificates by linking the Korea Securities Depository’s electronic registration system with account management institutions (securities firms).”

Meanwhile, attention is turning to whether Lucentblock will move to restructure its business after failing to obtain the preliminary license for the fractional investing OTC exchange.

Some have floated the possibility that it may shift its business focus from “distribution” to “issuance.” In that case, it could continue operations for a certain period while retaining its sandbox operator status.

However, once the OTC exchange receives final approval and begins operations, Lucentblock would have to shut down the platform it has been operating.

Heo said, “We will share the specific next steps as soon as relevant decisions are made.”