Korea Weighs Crypto Exchange Stake Cap, With 34% Exception for Innovators
The South Korean government is pushing to cap controlling shareholders' stakes in cryptocurrency exchanges at 20% as part of its Digital Asset Basic Act. However, there's an exception that would allow holdings of up to 34% for operators that meet certain conditions, including innovation requirements. The proposal also includes restrictions on voting rights and orders to dispose of excess holdings for shares above the ceiling.
The government views exchanges as core infrastructure for virtual-asset trading and wants to ease ownership structures that concentrate control in the hands of a small number of major shareholders. If enacted, the law would shift exchanges from a registration system to a licensing regime.
The proposed cap on controlling-shareholder stakes has been one of the most contentious issues in discussions over the Digital Asset Basic Act. Forcing existing major shareholders of exchanges to sell down their holdings could trigger controversy over property rights and bring management-control risks into sharper focus.