Concerns have been raised that a partnership between Korea Investment & Securities and cryptocurrency exchange Coinone, which allows domestic stock trading via the Coinone app, may contravene the “separation of finance and virtual assets” principle. Lee Eui-won, Chairman of the Financial Services Commission, stated that he would review whether this arrangement complies with the separation principle.
Democratic Party of Korea lawmaker Kang Jun-hyun pointed out during a National Audit hearing held on the 22nd at the Seoul Yeouido National Assembly, conducted by the Political Affairs Committee targeting the Financial Services Commission and the Financial Supervisory Service, that “This summer, Korea Investment & Securities enabled virtual asset investors to invest in stocks directly without going through a securities firm’s system. Following this, the Financial Supervisory Service sent a letter to securities firms requesting prior consultation.” He added, “Securities firms are engaged in the financial investment industry, while cryptocurrency exchanges are virtual asset businesses. Does this align with the principle of separating finance and virtual assets?”
Lee (Chairman) said, “While we need to look at the specifics, I understand that this is not a case where securities firms directly trade virtual assets, but rather they are linked through links or similar means.” He added, “We will review the matter.”
Kang (Rep.) emphasized, “The Financial Supervisory Service has also sent an official letter. We need to consider how to prevent any disruption of the market.”
Korea Investment & Securities launched a domestic stock trading service via the Coinone app on July 24. Under this structure, users select their desired stocks in the “Stock Investment” tab of the Coinone app and, after completing a simple authentication process, can buy and sell stocks through Korea Investment & Securities’ WTS (Web Trading System). This was the first initiative following Korea Investment & Securities’ acquisition of a 20% stake in Coinone in May to establish a strategic partnership.
The principle of separating finance and virtual assets is a policy stance that prohibits traditional financial institutions, such as securities firms and banks, from directly investing in virtual assets or being involved in the operation of exchanges. Since its 2017 policy response to virtual asset speculation, the financial authorities have applied this separation principle in the form of administrative guidance.
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