LucentBlock STO Rejection Sparks Political Fight as PPP Lawmaker Says Youth Startup Was Sacrificed for Big Business

Kang Seung-gyu, a lawmaker from the opposition People Power Party, criticized the Lee Jae-myung administration and Prime Minister nominee Han Seong-sook over LucentBlock’s failure to win approval to operate an over-the-counter exchange. He said the government spent seven years nurturing the real estate fractional-investment startup only to hand the core business license to large fintech companies.

At a June 23 press conference related to Han’s confirmation hearing, Kang said the administration had fostered LucentBlock as a youth startup and then, at the final stage, shifted the business opportunity to major fintech firms and others. He also accused the president and ruling party officials of only appearing to support the company while ultimately wiping out seven years of effort by its young founders.

Earlier, the Financial Services Commission rejected LucentBlock in its review of operators for an over-the-counter marketplace that would handle distribution of token securities, or STOs. The regulator said LucentBlock received lower marks than rivals for its capital base and the specificity of its fundraising plan. It also said the company needed to improve its business plan, conflict-of-interest safeguards and other internal controls. The FSC added that the largest shareholder and related parties held a combined 51%, making it difficult to regard the company as a genuine consortium and leaving it heavily centered on an individual major shareholder.

LucentBlock disputed the regulator’s assessment. Chief Executive Officer Hur Se-young said the FSC’s interpretation of the company’s ownership structure was wrong. He said the “individual investment association” cited as the controversial second-largest shareholder is an officially recognized investment vehicle certified by the Ministry of SMEs and Startups and contains no personal equity stake. In the company’s view, the FSC mistakenly treated a government-certified investment vehicle as an individual holding and reached an unfair conclusion.

Kang said the case raised questions about Han’s responsibility because she previously served as minister of the Ministry of SMEs and Startups, the agency in charge of the sector. He said the heart of youth innovation policy is helping startups open new markets, but in reality existing budgets and ongoing projects were wiped out by a single remark from the president. Kang added that he wanted to question Han, the former SMEs minister and current prime minister nominee, but was struggling because the government had not submitted enough materials. He called for clear documentation and an explanation from the government to resolve public doubts.