KOFIA: "Delay in Approval of Fractional Investment Market May Miss the Golden Opportunity"

The Korea Fintech Industry Association (KOFIA) has urged financial authorities to make a prompt decision regarding the approval of an over-the-counter (OTC) marketplace for fractional investment. The association expressed concerns that delays in the approval process, caused by recent controversies, could shrink the entire fractional investment market.

In a statement released on January 15, KOFIA emphasized, "Approval for the distribution market of fractional investment is a core foundation for the development of South Korea's future digital finance ecosystem," adding, "We must not miss the golden opportunity for next-generation financial transformation due to delays in opening the market."

Fractional investment is a financial service that allows investors to purchase small portions of various underlying assets, such as real estate, artwork, and music copyrights.

KOFIA stated, "Since the concept of fractional investment began to gain recognition in 2016, numerous companies have transformed innovative underlying assets into financial products, creating new funding channels across various industries. However, due to regulatory limitations, challenges remain in supplying liquidity and revitalizing the market."

The association explained that the approval of a fractional investment distribution market is expected by the industry to address these structural limitations and serve as a turning point for establishing a stable market within the institutional system. However, with the current postponement of the approval decision, fractional investment operators are facing management uncertainties, and some companies may even face existential threats.

Shin Beomjun, Chairman of the Token Securities Council under KOFIA, stated, "Companies in the fractional investment sector have been waiting for market revitalization through institutionalization for a long time, and I am concerned that the delay in opening the market may cause them to lose their last hope. Now is the time to promptly secure a stable distribution market through fair procedures."

He further stressed, "For the fractional investment industry to achieve sustainable growth, discussions on the approval of an OTC marketplace must not be delayed any longer," urging financial authorities to make a swift decision.