[Alpha Biz= Paul Lee] The South Korean government and National Assembly have agreed to cap the ownership stake of major shareholders in cryptocurrency exchanges at 20 percent, with a three-year grace period after the law takes effect.
According to political and cryptocurrency industry sources on March 4, the Democratic Party’s Digital Asset Task Force (TF) discussed the issue with the Financial Services Commission (FSC) on March 3 as part of deliberations on the second phase of the country’s digital asset legislation.
Under the agreement, the ownership limit for major shareholders will be set at 20 percent in the law, while exceptions of up to 34 percent may be permitted through presidential decree.
The grace period will extend until 2030, rather than being applied immediately. The timeline is understood to allow major exchanges sufficient time to restructure their ownership during the current administration.
The policy will primarily affect Upbit and Bithumb, which together account for roughly 90 percent of South Korea’s cryptocurrency trading market.
Smaller exchanges—including Coinone, Korbit and Gopax—will receive an additional three-year grace period due to their lower market share, effectively granting them six years to comply after the law takes effect.
Previously, the government had proposed limiting the shareholding of the largest shareholders in cryptocurrency exchanges to 15–20 percent.
The proposal reflects the view that exchanges function as quasi-financial institutions, as they not only facilitate trading but also custody investor assets and manage token listings.
If implemented, however, the regulation could place significant pressure on the major shareholders of leading exchanges to sell down their stakes.
At Dunamu, the operator of Upbit, Chairman Song Chi-hyung holds about 25.52 percent of the company. Bithumb Holdings, which controls Bithumb, owns 73.56 percent of the exchange. At Coinone, founder and CEO Cha Myung-hoon holds 53.44 percent, while NXC owns 60.5 percent of Korbit.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
