South Korea’s ruling Democratic Party and the Financial Services Commission have agreed to cap major shareholder stakes in domestic crypto exchanges at 20%. The decision follows a meeting between the party’s digital asset task force and the FSC on Tuesday, and the framework would allow exceptions up to 34% for new businesses through enforcement decrees, tied to the Commercial Act’s 33.3% veto threshold. The exception is intended to support early-stage operators entering the market. Large exchanges such as Upbit and Bithumb would have three years from the law’s enactment to comply with the new limit, and smaller exchanges would receive an additional three-year grace period on top of that.
Currently, ownership levels at major exchanges far exceed the proposed 20% cap. Upbit chairman Song Chi-hyung holds approximately 25.52% of the platform. Bithumb Holdings controls roughly 73.56% of Bithumb, Coinone chairman Cha Myung-hoon holds about 53.44%, and Mirae Asset Consulting is set to hold around 92.06% of Korbit following a pending acquisition. The FSC first proposed the ownership cap in January 2026, citing governance risks tied to concentrated shareholding.
That proposal drew strong pushback from the Digital Asset Exchange Alliance, which represents South Korea’s five largest exchanges. The DAXA warned the cap could “significantly impede” the country’s digital asset industry growth. Some local reports suggested that Bithumb’s accidental $43 billion Bitcoin transfer last month added pressure on regulators to act. The incident raised questions about internal risk controls at major exchanges.
It may have influenced the timing of the latest regulatory push. The ownership cap is expected to be included in South Korea’s upcoming Digital Asset Basic Act. The legislation will also address stablecoin issuance and crypto exchange-traded funds. Originally set for 2025, the bill has faced delays but the FSC is expected to finalize its proposal soon.
Leave a Reply