Korea is considering a 20 percent cap on major shareholders’ stakes in cryptocurrency exchanges, a move that could reshape the governance of the country’s digital asset trading platforms. While the impact on market leader Upbit may be limited, other major exchanges could face sweeping ownership changes, including large-scale reductions in controlling shareholders’ stakes. According to financial and political sources on Thursday, the government and ruling party are actively reviewing a proposal to cap the ownership stake of major shareholders in crypto exchanges as part of discussions on the Digital Asset Basic Act, often referred to as the second phase of cryptocurrency legislation. The current proposal would limit individual controlling shareholders’ stakes, although certain exceptions are also under consideration.
Within the Democratic Party (DP), there had initially been some opposition to the idea. However, the likelihood of introducing the ownership cap has increased as the government maintains a firm stance, citing investor protection and the need to prevent conflicts of interest. Industry observers say the impact on Upbit, the country’s largest exchange by market share, may be relatively limited even if the rule is introduced. Song Chi-hyung, the chairman and largest shareholder of Upbit operator Dunamu, currently holds about a 25.52 percent stake.
If the cap is set at 20 percent, he would only need to reduce his holdings by roughly five percentage points to comply. In addition, Dunamu is pursuing a comprehensive stock swap with Naver Financial. Even if the deal is completed, Naver’s stake is expected to be around 17 percent, meaning it would likely not breach the proposed ownership limit. Other major exchanges, however, could face much greater pressure. Bithumb is widely seen as the most affected if the 20 percent cap is introduced. Its holding company, Bithumb Holdings, currently owns about 73.56 percent of the exchange. The exact scale of a compliance-driven divestment could vary depending on how shares held by related parties are treated under the rules. Coinone could also face substantial changes. Founder and CEO Cha Myung-hoon and affiliated entities together control roughly 53.44 percent of the exchange. The proposed cap could potentially disrupt the founder-centric ownership structure that has long defined the company.
At Korbit, Mirae Asset Consulting recently signed a stock purchase agreement to acquire a stake. However, completion of the deal remains subject to certain conditions. Changes in legislation or agreements between the parties could alter the transaction structure, making regulatory developments a key variable. Gopax is also expected to be affected. The exchange’s largest shareholder is Binance, the world’s largest cryptocurrency exchange, which owns roughly 67 percent. Both the Financial Services Commission and the DP have indicated that foreign corporations will not be treated differently under the proposed rules. If the ownership cap is implemented, Binance would likely be required to reduce its stake. The government and ruling party plan to finalize the proposal through policy consultations.
However, the legislative process is expected to face considerable hurdles. Opposition lawmakers argue that imposing limits on exchange ownership could violate constitutional protections on property rights and the freedom to engage in professional and business activities. The National Assembly Research Service has also warned that the proposal could raise concerns about restrictions on property rights and potential retroactive legislation. Another complicating factor is that the chair of the National Assembly’s political affairs committee — the body responsible for reviewing the bill — belongs to the opposition party. An official from the DP’s digital asset task force said discussions with the government are ongoing. “We are considering multiple options with the government,” the official said. “The final details will be decided after upcoming consultations between the party and the administration.”
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