TL;DR
- South Korea’s FSC is considering imposing a 15% to 20% ownership cap on shareholders of crypto exchanges under the Digital Asset Basic Act.
- The bill would replace the three-year notification regime with a permanent authorization system, applying governance rules aligned with securities markets.
- The cap would affect Upbit and Coinone, where shareholders control more than 28% and 53%, and could force stake sales if the law is approved.
South Korea’s financial regulator will move forward with limits on ownership stakes held by major shareholders in crypto exchanges. The Financial Services Commission (FSC) is reviewing a cap of between 15% and 20% for shareholders, as confirmed by its chairman, Lee Eog-weon, during an official conference in Seoul.
The measure is part of the Digital Asset Basic Act, considered the second phase of the country’s virtual asset regulation. The bill aims to establish a comprehensive legal framework covering exchanges, service providers, and users, going beyond the current focus on AML and investor protection.
How the New Regulations Would Work
The new regulatory framework introduces a structural change to the operating status of exchanges. The current system operates under a notification regime that requires renewal every three years. The proposed law introduces a formal authorization model that would grant platforms permanent operating approval. According to the FSC, this shift requires governance rules aligned with the role exchanges play within the financial system.
Lee Eog-weon stated that under the new framework, exchanges would be treated as core infrastructure for the digital asset market. In that context, high ownership concentration increases the risk of conflicts of interest and undermines market integrity. The FSC noted that securities exchanges and alternative trading systems already operate under similar ownership limits, making it possible to apply equivalent treatment to crypto platforms.
Exchange Shareholders in Korea Could Be Forced to Sell
The proposal triggered immediate resistance within Korea’s crypto market. The council representing major domestic exchanges, including Upbit, Bithumb, and Coinone, warned that the ownership cap could disrupt existing corporate structures. At Dunamu, the company that operates Upbit, chairman Song Chi-hyung and related parties control more than 28% of the company’s shares. At Coinone, its founder holds a stake of around 53%. If the rule is enacted, both cases would require forced share sales.
Korea’s ruling party also raised objections. Several lawmakers argued that ownership caps are not widely adopted globally and could create regulatory misalignment with other markets.
Despite the criticism, Korean regulators reaffirmed that they will continue with the legislative process. The FSC remains in talks with the National Assembly and other ministries to define the scope and implementation timeline. The bill includes other provisions that are already agreed upon, such as a minimum capital requirement of 5 billion won, equivalent to $3.7 million, for stablecoin issuers. The final text must pass committee review and a parliamentary vote before becoming law.
