$BTC South Korea’s financial watchdog has openly backed a proposal to limit how much ownership major shareholders can hold in cryptocurrency exchanges, setting the cap at 15–20%. This move signals the government’s firm intent to push forward governance reforms, despite resistance from exchange operators and some political leaders.
Financial Services Commission (FSC) Chairman Lee Ok-keun said licensed virtual asset exchanges should no longer be viewed as ordinary private firms once they receive permanent approval under the upcoming Digital Asset Basic Law, which lawmakers aim to pass before the Seollal holiday on February 17.
Under the new framework, the FSC plans to replace the current three-year reporting system with a permanent licensing regime that comes with tougher governance standards. Regulators argue that excessive ownership concentration on platforms used by nearly 11 million users could create conflicts of interest and weaken market trust.
Currently, ownership levels far exceed the proposed limits at major exchanges. At Upbit’s operator Dunamu, Chairman Song Chi-hyung and related parties control over 28%, while Coinone founder Cha Myung-hoon holds around 53%.
The proposed ownership cap mirrors rules applied to traditional securities exchanges and alternative trading systems. Discussions are still ongoing regarding which entities would be affected and how quickly the rules would be enforced.
The reform could significantly reshape South Korea’s crypto industry, which handled roughly $115 billion in fund flows last year. Exchange operators warn that forced stake reductions could disrupt restructuring plans, including Naver’s acquisition of Dunamu.
The Digital Asset Basic Law also introduces a minimum capital requirement of 5 billion won (about $3.7 million) for stablecoin issuers. Other bills propose strict measures such as full reserve backing and no-fault liability for operators.
Authorities describe this as the second phase of Korea’s crypto regulation, following earlier laws in 2023–2024 focused on market abuse and investor protection. However, disagreements between the FSC and the Bank of Korea—especially over stablecoin governance—have repeatedly delayed the bill.
While the central bank favors a bank-led consortium model for won-based stablecoins, regulators warn that overly rigid ownership rules could slow fintech innovation. Industry groups, including the Digital Asset Exchange Association, continue to oppose the cap, arguing that government intervention in private ownership structures could harm the natural growth of the local crypto market.$BTC #BTC
