[2026 Parliamentary Audit] "Digital Asset Basic Act Blocked by Vested Interests" Draws Criticism... Crypto Taxes and Lucentblock Also Under Scrutiny (Roundup)

"Digital Asset Basic Act: Must it be bank-centered?" criticism
"No regulatory framework, yet taxing virtual assets? It's unreasonable; defer it"
"Lucentblock's OTC exchange approval to be reviewed depending on circumstances"

At the National Assembly Political Affairs Committee’s comprehensive audit of the Financial Services Commission and the Financial Supervisory Service on Oct. 22, lawmakers from both parties sharply criticized the government over the second phase of legislation on virtual assets, the Digital Asset Basic Act, and the Lucentblock controversy. Critics accused financial authorities of trying to give banks control over stablecoin issuance. Lawmakers also condemned the government’s plan to impose taxes on virtual assets despite gaps in the regulatory framework and Lucentblock’s failure to secure approval for an over-the-counter exchange for fractional investment products.

"The age of horse-drawn carriages is over, yet you insist on banks"... Criticism over delay in Digital Asset Basic Act

Financial Services Commission Chairman Lee Eog-weon answers lawmakers’ questions during a comprehensive audit of the Financial Services Commission and other agencies at the National Assembly on Oct. 22, 2026. Photo by Yoon Dongju.

Rep. Min Byungdeok of the Democratic Party of Korea strongly criticized the delay in the Digital Asset Basic Act and plans for a bank-centered stablecoin issuance system.

"The GENIUS Act passed in the United States in July 2025, and Hong Kong's law passed in August 2025. At this critical time, we did nothing," Min said, criticizing the government’s delayed response to legislation. "The Virtual Asset Committee, launched in November 2024, said it would meet once per quarter and hold additional meetings as needed, but it met only once, in January 2025," he said. "At that meeting, it said it would prepare a bill for the Digital Asset Basic Act in the second half of 2025."

The Digital Asset Basic Act is a comprehensive bill covering the entire virtual asset ecosystem, including issuance, distribution and disclosure. Its passage has been delayed because disagreements remain unresolved over restrictions on major shareholders’ stakes in exchanges and who can issue stablecoins, including a proposal requiring banks to hold a majority stake of at least 50% plus one share.

Min also criticized the debate over who should be allowed to issue stablecoins. "Regarding the government’s proposed Digital Asset Basic Act, isn't the government allowing only bank-led consortia to issue stablecoins as it seeks to foster a new industry?" he said. "Stablecoin safety depends on how securely the underlying assets are held. Where does the idea come from that a stablecoin is safe if issued by a bank but unsafe if issued by a non-bank?" He added, "We have moved from the age of horse-drawn carriages to the age of automobiles, yet people who make horse-drawn carriages keep saying cars are dangerous and that they can make carriages better. That should not happen."

Financial Services Commission Chairman Lee Eog-weon replied, "We are communicating with the industry in various ways. We have put together a proposal for how to balance innovation and stability, and we will discuss it together."

"No basic law, but taxes first?"... Calls to defer virtual asset taxation

Lawmakers also called for the regulatory framework to be put in place before virtual asset taxation takes effect next year.

Rep. Song Eonseok of the People Power Party said, "The government said it would prepare the Digital Asset Basic Act within this year, but it has yet to release a bill. The digital asset income tax is set to take effect next year. The government intends to tax digital assets first, even though their nature and the policy approach toward them have not yet been determined." He added, "Comprehensive taxation on financial income has been deferred, and there are complaints asking why income tax on digital assets alone should take effect next year."

Lee replied, "The Digital Asset Basic Act is in the final stages of consultations, and we will move as quickly as possible so it can be discussed." Asked by Song what he thought about abolishing or deferring the tax, Lee declined to give a direct answer, saying, "There are various views on virtual asset taxation, and I understand that opinions are being gathered. I believe all the relevant circumstances need to be fully considered."

Lucentblock's rejection draws attacks over a "financial cartel"... Lee Eog-weon says further review possible if needed

Democratic Party of Korea lawmaker Min Byungdeok questions NEXTRADE CEO Kim Haksoo during a comprehensive parliamentary audit of the Financial Services Commission and other agencies at the National Assembly on Oct. 22, 2026. Photo by Yoon Dongju.

Lawmakers from both parties joined forces to criticize the rejection of Lucentblock, which had spent four years testing its fractional investment business under a regulatory sandbox, in the approval process for an over-the-counter exchange for fractional investment products. In February 2026, the Financial Services Commission approved two preliminary authorization applicants: KDX, led by the Korea Exchange, and Nexchange, led by Nexttrade (NXT). Lucentblock was not selected. The controversy escalated after allegations emerged during the preliminary authorization process that Nexttrade had misappropriated Lucentblock's technology.

Asked by Rep. Cho Junghoon of the People Power Party whether Lucentblock would be allowed to obtain additional approval for an over-the-counter exchange, Lee replied, "We will review the matter if there is a need, depending on market conditions." He added, "The two operators have not yet entered the market, so we will first see how things go and then consider the points you raised in light of the various circumstances."

On the allegations that Nexttrade had misappropriated its technology, Min questioned Nexttrade CEO Kim Haksoo. "Nexttrade initially said it would not participate in the project, but the materials it received from Lucentblock CEO Huh Seyoung were an eight-page summary of the business background, a five-page five-year financial model and a six-page investment proposal," Min said. "Nexttrade received a higher score than Lucentblock for its business plan from the external evaluation committee. Was that because it had seen the materials?"

Kim denied the allegations of technology theft, saying, "We did not refer to them at all." He explained, "Our consortium includes Musicow, a major fractional investment company. Musicow's experience helped during the authorization process."

This content was produced with the assistance of AI translation services.