Lee Eokwon Responds to Criticism Over Major Shareholder Capital Gains Tax: "Will Discuss With Economy Minister"

Lee Eokwon, nominee for the Financial Services Commission chairman, stated that he would discuss the controversy over the "10 billion won major shareholder requirement," which was previously cited as a factor behind the stock market crash, with the Minister of Economy and Finance. Regarding stablecoins, he confirmed his intention to institutionalize the Korean won stablecoin and also to establish a regulatory framework for dollar stablecoins circulating domestically.

During the confirmation hearing held by the National Assembly's Political Affairs Committee on the afternoon of September 2, Lee responded to a question from Yoon Hanhong, chairman of the Political Affairs Committee (People Power Party), who asked whether the tax reform plan to strengthen the criteria for major shareholders subject to capital gains tax had been finalized. Lee said, "The Minister of Economy and Finance is listening to various opinions and deliberating carefully," and indicated that he would have further discussions.

Lee Eokwon, nominee for the Financial Services Commission chairman, is attending the confirmation hearing held by the National Assembly's Political Affairs Committee on the 2nd, listening to questions from lawmakers. Photo by Yonhap News Agency

Previously, immediately after the Ministry of Economy and Finance announced a tax reform plan to lower the threshold for major shareholders subject to capital gains tax from 5 billion won to 1 billion won per stock, the domestic stock market capitalization shrank by approximately 116 trillion won in a single day. The plan also faced criticism for contradicting the Lee Jaemyung administration's policy to boost the stock market and achieve KOSPI 5000, sparking considerable controversy.

On this issue, Lee responded, "This is not my responsibility," and gave a general answer that he would discuss the matter with the relevant department, the Ministry of Economy and Finance. He added, "The (tax reform plan) was announced as such, but ultimately, the enforcement ordinance needs to be amended."

In response, Chairman Yoon pointed out, "That means it hasn’t been withdrawn yet. It seems they are watching the stock market situation and hesitating." He urged Lee, as the incoming head of financial authorities, to take a clearer stance, saying, "Don’t just say it’s the Ministry of Economy and Finance’s responsibility-the Financial Services Commission should take the lead. If you remain ambiguous, watching the market sentiment, it amounts to a breach of duty toward stock investors."

Additionally, Lee stated that he is working on establishing safeguards in the process of institutionalizing stablecoins. In response to a question from Kang Junhyun, a lawmaker from the Democratic Party of Korea, who asked whether the Financial Services Commission is prepared to exercise authority such as ordering the suspension of issuance or redemption if the increased use of stablecoins destabilizes the financial market, Lee replied, "We are preparing sufficient and reliable safeguards."

Regarding whether stablecoins should be issued only by banks or expanded to non-bank institutions, he said, "We need to assess the situation." He added, "In addition to institutionalizing the Korean won stablecoin, we also need to establish a regulatory framework for dollar stablecoins circulating domestically," and noted that preparations are underway in this regard.