South Korea Set to Cap Crypto Exchange Shareholders at 20%

South Korea's financial authorities are set to introduce legislation regulating digital assets in early September. The Digital Asset Basic Act will be submitted to the National Assembly, with a provision capping major shareholders' stakes in crypto exchanges at 20% regardless of market share.

The Financial Services Commission is sponsoring the bill, which aims to establish broader regulations for virtual asset businesses and set rules for stablecoin issuance and distribution. A limit on major shareholders' stakes has emerged as the biggest issue in the legislation, with authorities discussing a single cap that would apply equally regardless of an exchange's size or market share.

The 20% ceiling is intended to encourage traditional financial companies, including banks, to participate in exchange governance and prevent any single shareholder from exercising unilateral control over management. However, lawmakers may ease the limit to 25% to 30% during parliamentary review if they deem it too strict.