SEOUL: The South Korean government has dropped a regulatory bombshell on the nation’s booming cryptocurrency sector. In a bid to check the influence of “crypto chaebols,” the Financial Services Commission (FSC) is finalizing plans to impose a strict cap on the ownership stakes held by major shareholders in virtual asset exchanges.
The “Public Role” Argument FSC Chairman Lee Eog-weon confirmed the move on Wednesday, stating that crypto exchanges have evolved beyond simple trading platforms. “Exchanges now fulfill a broader public role similar to traditional financial infrastructure. Their governance must reflect this responsibility,” Lee argued. Under the proposed Digital Asset Basic Act (Phase 2), the government aims to limit a single shareholder’s stake to 15-20%. This mirrors the ownership strictures placed on traditional banks and the Korea Exchange to prevent monopolies and “owner risk.”
Panic in the Boardroom The proposal has sent shockwaves through the “Big 5” exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax.
- Upbit: Founder Song Chi-hyung, who controls the operator Dunamu, may be forced to divest a significant portion of his holdings.
- Bithumb: The exchange, currently aiming for an IPO, would face a complex restructuring as its holding company owns over 70% of the entity.
Industry Pushback The Digital Asset Exchange Alliance (DAXA) has pushed back, calling the measure “excessive” and potentially unconstitutional. “Forcing founders to sell their shares infringes on property rights and will kill the entrepreneurial spirit that built this industry,” a DAXA representative stated. Despite the outcry, the regulator appears determined to push the bill through the National Assembly before the end of the first quarter of 2026.
