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[Reporter's Notebook] FSC head under fire for controversial comment on cryptocurrency

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Financial Services Commission (FSC) Chairman Eun Sung-soo, right, speaks during a parliamentary committee meeting at the National Assembly in Seoul, last Thursday. Yonhap
Financial Services Commission (FSC) Chairman Eun Sung-soo, right, speaks during a parliamentary committee meeting at the National Assembly in Seoul, last Thursday. Yonhap

By Anna J. Park

Financial Services Commission (FSC) Chairman Eun Sung-soo's recent comments on the cryptocurrency investment frenzy not only triggered a backlash from investors, but also stupefied those who expected a more insightful perspective on cyber money from the chief financial regulator.

"I don't think it is the right path to jump on the bandwagon of recklessly buying a digital asset that's fluctuating more than 20 percent a day. If the young generation takes the wrong path, it is elders' obligation to correct them and tell them it is wrong," FSC head Eun said during a parliamentary committee meeting held last Thursday.

The comments by the financial regulator were interpreted as sounding both condescending and preachy in tone by cryptocurrency investors here, most of whom are in their 20s and 30s and disillusioned by soaring apartment prices and the dearth of jobs. The comments also reflected his own value judgment that cryptocurrency trading is "wrong."

Many young Koreans were surprised by the apparently simplistic view that the country's top financial regulator displayed toward the burgeoning blockchain-based cryptocurrency sector.

Whether one agrees with his opinion or not, it was a big disappointment to see a lack of deep policy consideration regarding the fast-growing digital asset market.

Furthermore, the FSC chief compared cryptocurrency trading to buying and selling artworks, in order to drive home the point that digital asset investors do not deserve to be protected from potential losses. This remark also left the public puzzled over how the trading of artworks could be compared to investing in cyber money.

Online petition calling for Eun's resignation

Infuriated coin investors are calling for the top financial regulator to step down for making those remarks.

"You said adults should teach young people who take the wrong path. (…) Please think deeply about who created the wrong path and resign from your position voluntarily, taking responsibility for your comments," read an online petition at the Presidential Office of Cheong Wa Dae, which was uploaded the day after Eun made those comments.

"I wonder if you have any proper understanding about blockchain and the coin market. I cannot help but think this way, as I heard you compare the cryptocurrency market to artworks, making me conclude that Korea's financial system cannot catch up with the level of advanced countries," the petition harshly criticized. The petition drew signatures from 114,028 people ― as of 3:30 p.m. Sunday ― just three days after it was posted.

Eun's controversial comments were also ridiculed as they were traded as a Non-Fungible Token (NFT) at one ethereum, or around 2.7 million won ($2,416). The NFT was made out of a news article on Eun's comment on Thursday, and it was sold on the NFT market, "OpenSea," last weekend.

Need for constructive discussion

What is oddly bizarre is that the country's financial regulators, as well as the National Assembly, have failed to engage in any constructive policy discussions about cryptocurrency trading or their markets, which have been around for more than a decade now. While government authorities sat on their hands, the digital asset market has grown fast globally, becoming an undeniable part of the financial landscape.

The country's capital market act does not even contain a legal definition of cryptocurrency, while the Moon Jae-in administration plans to start taxing cryptocurrency trading from next year. What the FSC should do is to acknowledge the need to fill the void between the reality and actual policies, rather than making outdated comments.

Park Ji-won

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