South Korea Proposes 15-20% Cap on Crypto Exchange Ownership

South Korea's financial regulators are advancing plans to cap major shareholders' stakes in cryptocurrency exchanges at 15 to 20 percent, a measure aimed at bolstering governance standards as digital asset platforms assume greater roles in the financial system. The proposal, outlined in the forthcoming Digital Asset Basic Act, reflects ongoing efforts to treat exchanges as critical infrastructure rather than ordinary private entities, according to statements from Financial Services Commission Chairman Lee Eogweon.

The Financial Services Commission has reviewed the ownership limits as part of broader reforms under the legislation, which lawmakers plan to submit to the National Assembly before the Lunar New Year holiday on February 17. Lee emphasized the need for these caps during a media briefing this week, stating that concentrated ownership could heighten conflicts of interest and undermine market integrity. He noted that similar restrictions already apply to securities exchanges and alternative trading systems, making the approach reasonable for virtual asset platforms. Under the current system, exchanges operate via a notification process requiring renewal every three years....