Gov't to impose cap on crypto exchange ownership, citing broader public role
Financial Services Commission Chairman Lee Eog-weon speaks during a media conference at Government Complex Seoul, Wednesday. Yonhap
Financial Services Commission Chairman Lee Eog-weon formally stressed Wednesday the need to limit the ownership stakes of major shareholders in virtual asset exchanges. He said the move is necessary to align governance standards with the exchanges’ increasing public role.
The remarks indicate that the country’s top financial regulator intends to push ahead with the plan despite resistance from industry players and concerns raised by the ruling Democratic Party of Korea.
The regulator is reportedly reviewing a cap of about 15 to 20 percent on controlling shareholders’ stakes, a provision increasingly expected to be incorporated into the tentatively titled Digital Asset Basic Act, widely referred to as the second phase of virtual asset legislation.
Lee said existing regulations, including the Act on Reporting and Using Specified Financial Transaction Information and the Act on the Protection of Virtual Asset Users, mainly focus on anti-money laundering and investor protection. By contrast, the new bill is intended to serve as a comprehensive legal framework governing the entire virtual asset ecosystem, from service providers to investors.
“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 said during a media conference. “This higher status means exchanges need governance rules that match their larger role and greater responsibilities.”
He emphasized that once licensed, exchanges would no longer be treated simply as private enterprises but would assume characteristics akin to public infrastructure.
“Excessive concentration of ownership could increase the risk of conflicts of interest and undermine market integrity,” Lee said. “Securities exchanges and alternative trading systems are already subject to ownership limits, making it reasonable to apply similar standards to virtual asset platforms.”
He added that the proposal is part of a broader effort to integrate crypto exchanges into the mainstream financial system, reinforcing accountability, transparency and the public interest.
Earlier, the joint council representing domestic virtual asset exchanges, including Upbit, Bithumb and Coinone, voiced opposition following media reports that the newly proposed Digital Asset Basic Act would cap major shareholders’ stakes in virtual asset exchanges at around 20 percent. The group warned that the proposed cap could hinder the development of Korea’s digital asset sector.
At Dunamu, which operates the country’s largest cryptocurrency exchange, Upbit, Chair Song Chi-hyung and related parties hold more than 28 percent of the company’s shares, while Coinone founder Cha Myung-hoon controls about 53 percent. If the law is enacted as proposed, they would be forced to sell significant portions of their holdings.
Concerns have also been raised by the ruling party, which argued that similar ownership caps are uncommon internationally and could put Korea out of step with global regulatory trends.
In response, Lee said he remains in close talks with the party, noting that while there is broad agreement on the policy’s necessity, discussions are ongoing over its scope and timing.
“The Digital Asset Basic Act is a major legislative undertaking,” Lee said. “Consultations with the National Assembly and relevant ministries will continue to ensure the bill moves forward without unnecessary delays.”