[2025 Audit] Criticism Over Fragmented Digital Asset Supervision... Lee Chanjin: "Will Reflect in Second-Phase Legislation"

Lee Chanjin, Governor of the Financial Supervisory Service, has stated that he will do his utmost to reflect countermeasures in the upcoming second phase of legislation regarding the digital asset financial supervisory system, which has been criticized for being fragmented across multiple agencies and laws.

Yonhap News Agency

On the morning of the 21st, during the National Assembly’s Political Affairs Committee audit of the Financial Supervisory Service, Lee responded to criticism from Kangil Lee, a lawmaker from the Democratic Party of Korea, who pointed out that, “As the world’s supervisory systems are transforming in the era of digital asset finance, Korea’s system remains fragmented among the Financial Services Commission, Financial Supervisory Service, Financial Intelligence Unit, and the Bank of Korea, resulting in regulatory imbalance and divergence from international standards.” Lee replied, “I largely agree,” and added, “We are preparing to ensure that the supervisory framework in the second phase of legislation will be comparable to that of legacy (traditional) finance.”

Emphasizing the international recommendation of the ‘same activity, same risk, same regulation’ principle, Assemblyman Lee pointed out, “To set appropriate regulatory levels, complex tokens such as real-world asset tokens (RWA), security token offerings (STO), and stablecoins must be classified, and regulations should be differentiated according to risk levels.” He also stressed, “A risk assessment system by business type-such as exchanges and issuers-must be established, and there is a need for the technical capability and personnel to secure, analyze, and inspect real-time trading and clearing data.”

In response, Lee Chanjin stated, “We are currently preparing by business sector, focusing on digital and IT fields, and are developing concrete plans through a task force in consultation with the Financial Services Commission.” However, he requested the National Assembly’s attention, citing practical difficulties regarding manpower and equipment.

He further explained that, regarding the monitoring of systemic risks that may arise from the linkage between new assets and traditional finance, as well as response manuals for liquidity crises at stablecoin issuers, “We are preparing to institutionalize these measures in the second phase of legislation.”

During the audit session, concerns were also raised about supervision of cross-border transactions. Assemblyman Lee asked, “Are there systems in place for sanctioning and supervising overseas exchanges used by domestic users and domestic exchanges used by overseas users, as well as joint investigations and joint sanctions between countries?” Lee Chanjin responded, “While these efforts are underway autonomously, we will do our best to incorporate them in the second phase of legislation.”

Lee Chanjin, who previously discussed international cooperation systems with the Chairman of the U.S. Securities and Exchange Commission (SEC), stated, “We are striving to benchmark the experiences of leading countries to avoid failures,” and added, “The task force on the second phase of legislation is finalizing matters with the Financial Services Commission, and there will soon be an opportunity to report to the members of the National Assembly’s Political Affairs Committee through the Financial Services Commission.”