South Korean regulators and the ruling party have agreed to propose a 20% ownership cap for major shareholders of domestic cryptocurrency exchanges. Larger platforms like Upbit and Bithumb would have three years to comply, as current ownership stakes significantly exceed the limit. The proposal, which may allow exemptions for new businesses, faces a legislative process amid concerns about restricting sector investment.
South Korea’s government and ruling party have agreed to cap major shareholder stakes in domestic crypto exchanges at 20%. The plan may allow exceptions up to 34% for new businesses through an enforcement decree.
Exchanges would have three years from the law’s enforcement to adjust their ownership structures. Smaller platforms could receive an additional three-year grace period.
Current ownership at major exchanges far exceeds the proposed cap. For instance, Bithumb Holdings owns roughly 73.56% of Bithumb, and Binance owns about 67.45% of GOPAX.
The proposal faces a lengthy legislative process and internal political opposition. Some lawmakers have raised concerns about restricting ownership in the crypto sector.
An industry insider warned the measure could have broader implications. “This is unprecedented worldwide and has low global consistency. If it is excessively introduced, it could have serious negative effects such as limited competition, slowed innovation, and strengthened barriers to entry,” they reportedly stated.
This follows other recent regulatory tightening in South Korea. In late January, the National Assembly approved stricter entry requirements for virtual asset service providers.
The updated rules allow authorities to examine executives and major shareholders for a wider range of violations. These include drug trafficking, tax evasion, and serious economic crimes.
