South Korea Proposes 20% Cap on Crypto-Exchange Ownership

South Korea’s FSC proposes a 15%-20% ownership cap on domestic crypto exchanges to curb conflicts of interest, amid government and industry pushback.

Rich by Coin

2026-01-29

The FSC has proposed a 15% to 20% cap on share ownership in domestic crypto exchanges to prevent conflicts of interest. The regulator argues that crypto exchanges are part of the financial system and should be governed accordingly. The plan faces resistance from the government and industry groups, who warn it could hinder market development. The draft bill will mainly focus on the rules surrounding the issuance of won-denominated stablecoins, while the government also seeks broader crypto regulations.

Currently, most of South Korea’s largest crypto exchanges are controlled by a single founder or company — usually their founders. None currently adheres to the FSC’s proposed rules. Song Chi-hyung, co-founder of Dunamu, the operator of the market-leading Upbit exchange, owns around 26% of Dunamu’s shares. This could soon change if the internet giant Naver gains regulatory approval to complete a share-swap deal that would see it take control of 100% of Dunamu’s shares.

The picture is similar elsewhere, with the gaming giant Nexon owning over 60% of Korbit’s shares, and Binance controlling over 67% of GOPAX’s shares. Coinone founder Cha Myung-hoon, meanwhile, owns some 53% of his exchange. Subsidiaries of Com2uS Holdings, a South Korean gaming firm, hold a combined total of almost 39% of Coinone’s shares. Bithumb’s ownership, the only other domestic exchange with a full operating permit, remains a source of contention.

Officially, Bithumb is majority-owned by Bithumb Holdings, but the firms DAA, Vidente, and BTHMB each hold sizeable stakes of up to 31%. South Korean media outlets and prosecutors have alleged that a controversial businessman named Kang Jong-hyun, the owner of Vidente, is Bithumb’s de facto owner.

Regulatory friction is likely as the government and industry groups oppose the plan, risking a stalemate over digital asset governance. While the Basic Digital Asset Act will focus on won-denominated stablecoins, regulators say a comprehensive framework for crypto is also needed. The ongoing friction between regulators, industry, and lawmakers could stall progress on crypto governance.