South Korea's FSC delays OTC exchange licensing due to fairness concerns

The South Korean Financial Services Commission (FSC) is delaying its final decision on licensing trading platforms for OTC security tokens. Although the review process has already been completed, the FSC did not discuss the relevant applications at its meeting on January 28. This unexpected delay indicates fundamental concerns regarding fairness and transparency.

Two consortia receive provisional approval – one remains excluded

According to NS3.AI, two consortia have been granted provisional approval for licensing: one led by the Korea Exchange (KRX) and a second by Nextrade. The provisional approval signals that these applications generally meet regulatory requirements. However, the simultaneous exclusion of the Lucentblock consortium has sparked controversy within the industry.

Criticism over lack of transparency and fairness

The absence of an explanation for Lucentblock’s rejection and the subsequent delay in licensing raise questions about the objectivity of the selection process. Industry observers criticize that the FSC has not provided sufficient reasons for its decisions. This lack of transparency could undermine trust in the regulation of token markets and complicate future licensing applications.

Implications and next steps

The delay in the final licensing suggests that the FSC is reconsidering its standards and criteria. Market observers expect the agency to issue clearer guidelines for licensing OTC security token platforms in the coming months. Until then, opportunities for comprehensive regulatory clarification remain open.