South Korea plans 20% ownership cap for crypto exchanges
South Korean regulators and lawmakers have agreed to introduce a 20% cap on major shareholder stakes in cryptocurrency exchanges. The decision was reached during a meeting between the ruling Democratic Party’s digital asset task force and the Financial Services Commission (FSC), the country’s top financial regulator.
According to Korea Herald, the FSC may allow larger ownership stakes of up to 34% in certain cases, if specified through enforcement decrees. Once the legislation is enacted, major exchanges will receive a three-year transition period, while smaller platforms will be granted additional time to adapt.
If the rule comes into force, the country’s largest crypto exchanges may need to significantly restructure their ownership. For example, Bithumb Holdings currently controls more than 73% of Bithumb, while Binance owns over 67% of the Gopax exchange, both far exceeding the proposed limit.
Crypto industry pushes back against the proposal
The initiative has drawn strong criticism from the Digital Asset Exchange Alliance (DAXA), a self-regulatory body representing South Korea’s five largest cryptocurrency exchanges, including Upbit and Bithumb. DAXA warned that artificially limiting shareholder stakes could slow the development of the country’s crypto industry and undermine the foundations of a still-emerging market. Regulators, however, argue that the proposal aims to reduce corporate governance risks linked to concentrated ownership.Some local media also linked the tighter oversight to an incident at Bithumb, where an accidental transfer of $43 billion in Вitcoin last month raised concerns about internal controls and risk management.
How South Korea regulates the crypto market
The ownership cap could become part of the Digital Asset Basic Act, a comprehensive crypto regulation package currently being prepared by the South Korean government. The law is expected to address major issues such as stablecoin issuance, crypto exchange operations, and potential crypto exchange-traded funds (ETFs).South Korea already maintains strict crypto regulations. Exchanges must partner with banks to provide real-name bank accounts for users and comply with stringent KYC and AML requirements. The legislation was initially planned for rollout in 2025, but the timeline has been delayed. The Financial Services Commission is now expected to present the final version of the proposal in the near future.
Earlier, we reported that a listing in South Korea boosted the AZTEC token by 82%.
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