South Korea Crypto Exchanges Oppose Proposed 20% Ownership Cap

• South Korean regulators are weighing a 15–20% ownership cap for major crypto exchange shareholders.
• Exchanges warn forced stake changes could disrupt governance and slow strategic decisions.
• Industry disputes comparisons with stock and bank rules, citing structural differences in crypto markets.

South Korea’s digital asset exchanges are objecting to a government plan that would cap major shareholders’ stakes at 15–20%, arguing that forced changes to ownership structures could change decision-making and weaken their position in global markets.

According to sources, the Financial Services Commission (FSC) is reviewing a measure for inclusion in its “Digital Asset Phase 2 Legislation” that would restrict the voting stakes of key shareholders in domestic platforms such as Upbit and Bithumb. 

The plan, which was reportedly shared with the ruling party’s Digital Asset Task Force, has quickly become a key point in the broader debate over how far authorities should go in treating large crypto exchanges as public-interest infrastructure.

The proposal takes into account Nextrade, an alternative stock exchange that operates under a 15% voting shareholding limit, and considers applying comparable limits to digital asset exchanges. If enacted, industry participants say the change would not simply require partial divestments but would compel companies to redesign management control and internal decision-making frameworks.

Opposition has focused on what critics describe as the measure’s “post-regulatory” character. Stakeholders argue that imposing artificial equity distribution on private firms after they have expanded runs into constitutional protections related to private property and creates uncertainty around the stability of existing market structures.

Fears Over Management Speed and Competitiveness

Executives in the sector have also warned that revising stake structures would inevitably affect the “speed of management” and the allocation of responsibility within organizations. In their view, dispersed ownership could slow quick and coordinated decision-making in an industry with a short operating history and high market volatility, where domestic exchanges compete directly with global platforms.

Stakeholders point to major international exchanges where founders remain key shareholders and managers, arguing that this alignment of long-term vision and control has underpinned ecosystem development. Some industry voices caution that physically altering such arrangements in South Korea could discourage entrepreneurship and accelerate the relocation of promising firms abroad.

Comparisons With Stock and Banking Rules Disputed

Industry representatives also contend that direct comparisons with stock exchanges overlook structural differences. While securities markets separate exchange operations and brokerage functions, relying on specific governance mechanisms, digital asset trading and brokerage commonly occur on a single platform.

One exchange noted that the New York Stock Exchange is a wholly owned subsidiary of its holding company, ICE, and cited overseas examples where venues such as the NYSE and Nasdaq do not face bank-style equity caps.

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