South Korea’s Financial Services Commission Chairman Lee Eog-weon highlighted the need to limit ownership stakes of major shareholders in virtual asset exchanges. He said the move is necessary to align governance standards with the exchanges’ growing public role.
The proposed ownership limits come amid broader regulatory moves in South Korea’s crypto market. The government is preparing to expand anti‑money laundering rules by extending the crypto Travel Rule to transfers below $680.
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The change follows the Virtual Asset Users Protection Act, which took effect in July 2025 and bans insider trading, market manipulation, and illegal trading of virtual assets. Exchanges will now be required to collect and share sender and receiver information for smaller transfers.
Digital Asset Law May Limit Shareholding
The remarks suggest the regulator plans to push ahead with the proposal despite resistance from industry participants and concerns from the ruling Democratic Party of Korea.
The FSC is reportedly reviewing a cap of about 15 to 20 percent on controlling shareholders’ stakes. The provision is expected to be included in the tentative Digital Asset Basic Act, considered the second phase of the country’s virtual asset legislation.
South Korea Targets Ownership Concentration Risks
Lee said existing rules, including the Act on Reporting and Using Specified Financial Transaction Information and the Act on the Protection of Virtual Asset Users, focus mainly on anti-money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and investor protection. “The proposed shift to an authorization system would effectively grant exchanges permanent operating status,” he said, adding that exchanges would need governance rules that reflect their larger role.
He noted that once licensed, exchanges would no longer be treated simply as private enterprises but would assume characteristics similar to public infrastructure. “Excessive concentration of ownership could increase the risk of conflicts of interest and undermine market integrity,” Lee said. He also pointed out that securities exchanges and alternative trading systems already face ownership limits.
The proposal is part of an effort to integrate crypto exchanges into the mainstream financial system, improving accountability, transparency, and public oversight.
Upbit, Coinone Stakes May Be Capped
The joint council of domestic exchanges, including Upbit, Bithumb, and Coinone, has opposed the cap, warning it could hinder the sector’s development. At Upbit, Chair Song Chi-hyung and related parties hold over 28 percent of shares, while Coinone founder Cha Myung-hoon controls about 53 percent.
Lee said discussions with the ruling party are ongoing. “Consultations with the National Assembly and relevant ministries will continue to ensure the bill moves forward without unnecessary delays,” he said.
