Min Byung-deok Says Lucent Block Was Excluded From STO Exchange Licensing; FSC Defends Fair Process

Criticism surfaced that Lucent Block, a fractional investment distribution platform, was not evaluated fairly after failing to obtain a license to operate a tokenized securities, or STO, exchange.

Speaking at the National Assembly Political Affairs Committee’s parliamentary audit on Oct. 8, lawmaker Min Byung-deok said Lucent Block spent four years operating in South Korea’s financial regulatory sandbox for 500,000 users without a single incident and helped open the market. Yet financial institutions with no operating experience received higher marks in the licensing review, he said.

Min also took issue with the fact that the process did not go through the Innovative Finance Review Committee under Article 21 of the Special Act on Support for Financial Innovation. He further questioned the basis for limiting approvals to a maximum of two operators and raised allegations of preferential treatment for KDX, led by Korea Exchange, and NXT, led by Nextrade.

Financial Services Commission Chairman Kim Byoung-hwan said the licensing framework had been sufficiently publicized after gathering industry feedback and that he believed the process was fair.

He added that he understood the frustration innovative companies may have felt.