TL;DR:
- South Korea’s regulators and lawmakers agreed to cap major shareholders of crypto exchanges at 20%, with FSC-defined exceptions up to 34%.
- Upbit and Bithumb would get a three-year grace period, while smaller exchanges receive three years before the limit bites.
- DAXA warned the cap could impede industry growth; the rule is slated for the Digital Asset Basic Act alongside stablecoins and crypto ETFs, after delays beyond 2025.
South Korean regulators and lawmakers have agreed to cap major shareholder stakes in cryptocurrency exchanges at 20%, ending months of dispute and setting up a major governance rewrite for the sector. The ruling Democratic Party’s digital asset task force met the Financial Services Commission on Tuesday, a Korea Herald report said, and the two sides aligned on the threshold despite industry pushback. In practical terms, a 20% ownership ceiling for exchange controllers targets concentrated equity structures that dominate the largest venues. The plan is expected to sit inside the upcoming Digital Asset Basic Act now.
Ownership limits, carveouts, and the compliance runway
Under the compromise, the 20% limit comes with a regulated pressure valve: the FSC can permit ownership up to 34% in exceptions defined through enforcement decrees. That design makes a cap with carveouts and regulator discretion the real operating model, not a one-size rule. Timing is also engineered to reduce shock. Major exchanges such as Upbit and Bithumb would face the new ceiling after a three-year grace period once legislation is enacted, while smaller exchanges would get an additional three years to adapt. This runway gives time to plan divestments, find partners, and reset governance.
If the ownership cap becomes law, restructuring would be unavoidable for most large players. Bithumb Holdings reportedly controls over 73% of Bithumb, while Binance holds more than 67% of Gopax, far above the planned threshold and potentially requiring divestments or dilution. For the market, forced ownership redesign becomes the compliance baseline unless an FSC exception applies. DAXA, the self-regulatory alliance representing the country’s five major exchanges including Upbit and Bithumb, warned the cap could “significantly impede” industry growth. It argued that artificially altering private-company ownership would undermine the foundations of an emerging digital asset industry.
Regulators’ willingness to press ahead may also reflect renewed concerns over internal controls. Local reports suggested Bithumb’s accidental $43 billion bitcoin transfer last month intensified unease about risk management and may have influenced the decision. The ownership cap is expected to be folded into the Digital Asset Basic Act, which is set to cover stablecoin issuance and crypto exchange-traded funds. After delays from an original 2025 rollout target, the FSC’s proposal becomes the next gating milestone and is expected to be finalized soon, per Hankyung. That shift shows ownership rules becoming a prudential tool now.
