Lucentblock has strongly protested what it called an unfair approval process by financial authorities for an over-the-counter exchange for token securities (STO). Chief Executive Se-young Heo raised allegations of technology theft by NextTrade at a news conference on Monday and said the company filed a complaint with the Fair Trade Commission.

NextTrade approached the company under the pretext of investment and, after signing a non-disclosure agreement, took sensitive information including core technology and the shareholder registry, Heo said. He said that scrapping the contract and applying for approval independently just 2 to 3 weeks later amounted to clear technology theft and obstruction of business activities.

Lucentblock stressed that over the past 7 years it has proven market viability by circulating assets totaling 30 billion won through a regulatory sandbox, with 500,000 users. He appealed that achievements built over 2,609 days since founding the company, while running the equivalent of 530,000 km, the distance of 14 laps around the Earth, were at risk of disappearing after being pushed aside by an entrenched interest group’s "paper plan."

It also criticised the financial authorities’ review criteria. It made no sense that the Korea Exchange or NextTrade, which had no business experience, received higher evaluations in the "technology and stability" category than the company, which has operated its platform for 4 years without an accident, Heo said. He said it was the result of valuing the nameplate of large institutions over empirical data and directly undermined the purpose of the Act on Special Cases Concerning Support for Financial Innovation, which is intended to protect innovators.

Lucentblock said that if it fails to win approval, its designation as an innovative financial service will expire, effectively putting it on a path to closure. He said the company wants not preferential treatment but a chance for startups that have proven innovation to compete under fair rules, and appealed for attention so that the legislature’s "exclusive operating rights" provision is not neutralised in administrative practice.

The Financial Services Commission plans to select the final operator on Tuesday for a pilot launch of an over-the-counter STO exchange on Jan. 14. The industry is closely watching how Lucentblock’s complaint to the Fair Trade Commission could affect the approval decision, as the Korea Exchange-Koscom consortium and NextTrade are seen as likely selections.