Lee Eokwon Vows to Ensure No One Refrains from Reporting Stock Price Manipulation Due to Insufficient Rewards (Comprehensive)

Briefing by the Financial Services Commission at the National Assembly’s Political Affairs Committee
"We will secure funding even by mobilizing reserve funds," stressing the eradication of unfair trading
Despite industry opposition, "Shareholding limits for major shareholders of virtual asset exchanges are necessary"
On the controversy over licensing a fractional investment OTC trading platform, he stressed a "fair review"

On the 5th, Lee Eogwon, Chairman of the Financial Services Commission, stated in relation to rewards for reporting unfair trading such as stock price manipulation, "We will make sure to secure sufficient funding, even by mobilizing reserve funds if necessary, so that people do not refrain from reporting due to a lack of rewards." He judged that it is necessary to expand incentives for reporting in order to make the Lee Jaemyung administration's pledge of "stock price manipulation means total ruin" a reality.

At a briefing on the work of the Standing Committee on Political Affairs at the National Assembly on the same day, Chairman Lee responded to criticism that this year's budget for rewards for reporting stock price manipulation, at 440 million won, is insufficient by saying, "We will work closely with the Ministry of Economy and Budget." He added, "Eradicating unfair trading is the most important task, and in terms of how to build an incentive system, whistleblowing by insiders is an extremely effective means," emphasizing that "we need to build a strong support system."

Lee Eokwon, Chairman of the Financial Services Commission, adjusts his glasses while attending a plenary meeting of the Standing Committee on Political Affairs held at the National Assembly on Feb. 5, 2026. Photo by Kim Hyunmin

At the "KOSPI 5000 and Beyond Seminar" held at the Korea Exchange on the 3rd, Chairman Lee had also stated, "We will definitely eradicate unfair trading," and "We will strengthen incentives for voluntary reporting by insiders, which stock price manipulation forces fear the most and which is the most effective." Earlier, Presidential Chief of Staff Kang Hoonshik had also pointed out the lack of effectiveness by saying, "In our country, even if someone reports stock price manipulation worth several hundreds of billions of won, the maximum reward is only 3 billion won."

On the same day, Chairman Lee reiterated that, in order to build a financial system trusted by the public, "We will work to eradicate stock price manipulation by preventing insider unfair trading and strengthening disclosure." On the same day, a joint response team to eradicate stock price manipulation, composed of the Financial Services Commission and other bodies, also conducted a search and seizure of the headquarters of an economic newspaper. Some reporters at the media outlet are reported to be involved in front-running, in which they allegedly obtained stock information in advance through improper means and made trading profits.

In addition, Chairman Lee reaffirmed the principle that he would "thoroughly review and conduct a fair and strict examination" regarding the licensing of a fractional investment over-the-counter trading platform, which has recently sparked controversy over "fairness."

This comes in the wake of the controversy that has spread since it became known that, on the 7th of last month, the Securities and Futures Commission under the Financial Services Commission selected the "KDX Consortium," centered on the Korea Exchange (KRX), and the "NXT Consortium," led by Nextrade (NXT), as preliminary licensees for an STO over-the-counter trading platform, and that Lucentblock, which was effectively eliminated, raised issues regarding the fairness of the licensing process and alleged technology theft. Since then, the Financial Services Commission has been in deep deliberation, postponing twice (January 14 and 28) the submission of the relevant agenda item to the regular meeting of the Financial Services Commission, which is the final decision-making step following the Securities and Futures Commission.

He said, "The licensing process is underway, and nothing has been finally decided yet," but added, "When the results are announced, we will explain as fully as possible, transparently and in detail, what the grounds are."

Regarding limits on the shareholding ratio of major shareholders of virtual asset exchanges, he expressed support despite opposition from the industry. Chairman Lee explained, "Through the Basic Act on Digital Assets, we will introduce a licensing system for exchanges, thereby further expanding the new status, roles, responsibilities, and authority granted to exchanges," and "Once a license is obtained, it is effectively permanent, so we concluded that it would be desirable, from a corporate governance perspective in line with the enhanced credibility of exchanges, to limit and disperse the equity stakes of major shareholders."

He also stressed a policy direction to promote measures to enhance trust and innovation in the KOSDAQ market and to improve access to capital markets for unlisted and small and medium-sized enterprises so that the vitality of the capital market can be sustained. Recently, the Financial Services Commission eased related regulations to allow the launch in Korea of leveraged exchange-traded funds (ETFs) that track twice the returns of individual stocks, and it is currently reviewing improvements to ETF listing and delisting requirements and new product protection mechanisms.

For qualitative improvements in the capital market, the authorities will bring forward the implementation of higher delisting criteria and are also considering measures to delist poor-quality penny stocks. Chairman Lee explained, "We have decided to raise the delisting threshold based on market capitalization from less than 4 billion won to 15 billion won this year, 20 billion won next year, and 30 billion won thereafter, and we will move up the implementation schedule." He added, "On the Nasdaq in the United States, penny stocks are also subject to delisting requirements," and "We will boldly introduce such measures and thoroughly weed out rotten products and fake products."