South Korea’s Financial Services Commission Chair Lee Eog-weon highlighted the need to limit ownership stakes of major shareholders in virtual asset exchanges. He said the move is necessary to align governance standards with the exchanges’ growing public role. The proposed ownership limits come amid broader regulatory moves in South Korea’s crypto market. The government is preparing to expand anti-money laundering rules by extending the crypto Travel Rule to transfers below $680.
The change follows the Virtual Asset Users Protection Act, which took effect in July 2025 and bans insider trading, market manipulation, and illegal trading of virtual assets. Exchanges will now be required to collect and share sender and receiver information for smaller transfers. The remarks suggest the regulator plans to push ahead with the proposal despite resistance from industry participants and concerns from the ruling Democratic Party of Korea. The FSC is reportedly reviewing a cap of about 15 to 20 percent on controlling shareholders’ stakes, a provision expected to be included in the Digital Asset Basic Act’s second phase.
The joint council of domestic exchanges, including Upbit, Bithumb, and Coinone, has opposed the cap, warning it could hinder the sector’s development. At Upbit, Chair Song Chi-hyung and related parties hold over 28 percent of shares, while Coinone founder Cha Myung-hoon controls about 53 percent. Lee said discussions with the ruling party are ongoing. “Consultations with the National Assembly and relevant ministries will continue to ensure the bill moves forward without unnecessary delays,” he said.
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