Lee Kang-il: Won-denominated exchanges committed over 15 million violations of financial law; Bithumb's 620,000-bitcoin overpayment also slipped through
Lee Chan-jin: Coordination with KoFIU strengthened; framework nearly ready
Financial Supervisory Service Governor Lee Chan-jin said Monday that the government's planned Digital Asset Basic Act — the so-called second-phase legislation — will address the fragmented oversight of digital assets currently split among the Financial Services Commission, the FSS, the Korea Financial Intelligence Unit and the Bank of Korea.
Lee made the remarks at a national audit by the National Assembly's Political Affairs Committee in response to questions from Democratic Party of Korea lawmaker Lee Kang-il, who had raised the same issue of divided supervisory authority at last year's audit. "The government's proposal has not yet been announced, but the content on the supervisory framework is reflected in the draft being prepared," Lee said.
However, Lee Kang-il said there was no guarantee the FSS would be able to properly oversee digital asset businesses even after the second-phase law takes effect, arguing that glaring gaps already exist in the supervision of won-denominated exchanges that have come under the regulatory perimeter.
According to the lawmaker, transactions with unregistered overseas operators exceeded 90,000 cases at Coinone alone, while violations of the Act on Reporting and Using Specified Financial Transaction Information across all won-denominated exchanges totaled more than 15 million. "There are concerns that even the most basic anti-money-laundering obligations are not being properly enforced," he said.
Inadequate ledger management also came under scrutiny. Lee Kang-il said the FSS had examined Bithumb roughly three times yet never detected the flaw that led to the erroneous issuance of 620,000 bitcoin. "If people are told that a system incapable of verifying its own books can filter out criminal funds, they will not trust it," he said.
The lawmaker also raised questions about the fitness of exchange executives. He noted that executive-led misconduct at Bithumb — including the misappropriation of housing allowances, acceptance of bribes in exchange for listing favors, and large-scale anti-money-laundering violations — had recurred repeatedly, yet governance and executive accountability rules had never been applied because virtual asset businesses are not classified as financial companies. Lee Kang-il added that seven of the 16 former FSS officials who left the service after 2021 had moved to related exchanges. "Isn't this enough to invite suspicion?" he said.
Lee Kang-il urged the FSS not to wait for the second-phase legislation and to act now, calling on it to work with KoFIU to use information on suspected wallets identified by investigative authorities in its examinations.
In response, FSS Governor Lee said the agency was coordinating more closely with KoFIU than before. "We have been discussing the framework together and it is almost fully ready," he said.
won@heraldcorp.com
