South Korea’s Financial Services Commission (FSC) has shared its intention to move forward with the proposed cap on crypto exchange ownership despite concerns from industry players and the ruling Democratic Party of Korea (DPK).
FSC Backs Ownership Cap For Crypto ExchangesOn Wednesday, Financial Services Commission Chairman Lee Eog-weon revealed that the regulatory agency is reviewing a proposal to cap major shareholders’ stakes in crypto exchanges at around 15%-20%.
He argued that “excessive concentration of ownership” could increase the risk of conflicts of interest while undermining market integrity, noting that securities exchanges and other trading systems are subject to similar limits.
“Under the current system, virtual asset exchanges operate under a notification system that requires renewal every three years. The proposed shift to an authorization system would effectively grant exchanges permanent operating status,” Lee explained.
He emphasized that “this higher status means exchanges need governance rules that match their larger role and greater responsibilities.” As a result, exchanges would assume characteristics similar to public infrastructure.
Notably, major players like Song Chi-hyung, the chairman of Dunamu, the company that operates Upbit, and Cha Myung-hoon, the founder of Coinone, would be forced to sell significant portions of their holdings if the law is enacted.
The Democratic Party of Korea also expressed its concerns, observing that similar ownership caps are uncommon worldwide and could make South Korea’s framework inconsistent with global regulatory trends.
Lawmakers Set New Deadline For Digital Assets FrameworkAccording to the report, the ruling party’s members did not discuss the cap on crypto exchange ownership. Still, they revealed that they will introduce the framework before the Lunar New Year holiday on February 17.
DPK’s Lawmaker Ahn Do-geol said, “We plan to introduce the Digital Asset Basic Act before the Lunar New Year, and we hope that by then a plan agreed upon with the government as much as possible will be put together.”
Instead of the “unanimous consent system” proposed by the Bank of Korea (BOK), the task force settled on a consultative body to discuss stablecoin authorizations, comprised of the BOK, the FSC, the Ministry of Economy and Finance, and the Financial Supervisory Service.
The task force considered that requiring unanimity for stablecoin authorization would slow issuance, while observers believe that the central bank’s proposal was “a way to control stablecoins.”
In addition, the minimum statutory capital for stablecoin issuers was set at 5 billion won, approximately $3.48 million. Nonetheless, the report affirmed that there has not been an agreement on the issuance of won-pegged stablecoins.
Lee Kang-il, a DPK lawmaker on the task force, asserted that “the 50%+1 share rule remains contentious because there is still no willingness to concede among government ministries,” but added that they have prepared a mediation plan and will “make decisions in a direction that serves the national interest overall and benefits the public.”
