South Korea Agrees to Limit Crypto Exchange Ownership to 20%
South Korea is moving to cap major shareholder stakes in domestic crypto exchanges at 20%, following an agreement between the ruling Democratic Party and the Financial Services Commission. The decision, reported by the Korea Herald, aims to address governance risks tied to concentrated ownership. The proposed limit includes exceptions for new businesses, allowing up to 34% ownership through enforcement decrees, tied to the Commercial Act's 33.3% veto threshold.
Large exchanges like Upbit and Bithumb will have three years to comply with the new cap, while smaller exchanges receive an additional three-year grace period. Current ownership levels far exceed the proposed limit, with Bithumb Holdings controlling 73.56% of Bithumb and Mirae Asset Consulting set to hold 92.06% of Korbit following a pending acquisition.
The FSC first proposed the ownership cap in January 2026, but faced pushback from the Digital Asset Exchange Alliance, which warned the cap could hinder industry growth. Some reports suggest Bithumb's accidental $43 billion Bitcoin transfer last month added pressure on regulators to act, raising concerns about internal risk controls.
The ownership cap is expected to be included in South Korea's upcoming Digital Asset Basic Act, which will also address stablecoin issuance and crypto exchange-traded funds. Originally set for 2025, the bill has faced delays but is expected to be finalized soon.