S. Korea Weighs Ownership Cap for Crypto Exchange Shareholders

The South Korean government is planning to introduce an ownership cap for major shareholders of cryptocurrency exchanges in order to improve governance and transparency. The Financial Services Commission has been reviewing a proposal to limit a major shareholder's stake to 20% in principle, regardless of the exchange's size or market share.

According to sources, discussions are underway to allow up to 34% for certain exceptions, such as new operators. A three-year grace period for existing operators to unwind stakes above the cap is also being considered.

The regulators believe that the current governance structure of exchanges needs to be overhauled due to excessive concentration of management control among specific founders or major shareholders.