South Korea Caps Crypto Exchange Ownership at 20% Amid Governance Concerns

The South Korean government has agreed to limit major shareholder stakes in domestic crypto exchanges to 20% after a meeting between the party's digital asset task force and the Financial Services Commission. This decision came after a proposal from the FSC in January, citing governance risks tied to concentrated shareholding.

Large exchanges such as Upbit and Bithumb would have three years from the law's enactment to comply with the new limit. Smaller exchanges would receive an additional three-year grace period on top of that. Both platforms together control roughly 90% of South Korea's domestic crypto trading volume.

The FSC first proposed the ownership cap in January, citing governance risks tied to concentrated shareholding. That proposal drew strong pushback from the Digital Asset Exchange Alliance, which represents South Korea's five largest exchanges. The DAXA warned the cap could 'significantly impede' the country's digital asset industry growth.