S Korea Mulls 20% Ownership Cap on Crypto Exchange Shareholders

The South Korean government is moving to cap the stake that major shareholders can hold in cryptocurrency exchanges at 20%. According to sources, the Financial Services Commission (FSC) plans to present a draft of the Digital Asset Basic Act, which will govern the sector as a whole. The act includes provisions for virtual asset service providers and the issuance and circulation of stablecoins.

The ownership limit is one of the central points of contention in the government draft. The FSC has proposed capping major shareholders' stakes at 20% as a general rule, with exceptions for new entrants allowing up to 34%. Existing operators would be given a three-year grace period to unwind their holdings.

A compromise has emerged that would cap the exercise of voting rights instead of directly limiting ownership. Under this approach, shareholders could retain their stakes but exercise voting rights on only up to 20%.