South Korea is preparing a major regulatory overhaul that could reshape the ownership structure of its cryptocurrency exchanges. Lawmakers and financial regulators have agreed in principle to introduce a 20% cap on major shareholder stakes in domestic crypto trading platforms — a move aimed at strengthening transparency, governance and market stability.
The proposal was discussed between the ruling party and the Financial Services Commission (FSC), alongside the Democratic Party of Korea’s digital asset task force. If passed, the new rule would limit the influence of controlling shareholders in virtual asset exchanges operating in the country.
Under the draft plan, crypto exchanges would be given three years from the law’s implementation to adjust their ownership structures. Smaller exchanges may receive an additional three-year grace period. However, dominant platforms would be expected to comply within the initial three-year window.
Regulators are also considering limited exceptions for new market entrants. Through an enforcement decree, new operators could be permitted ownership stakes of up to 34%. This level mirrors the 33.3% veto threshold under South Korea’s Commercial Act, which allows minority shareholders to block certain corporate decisions at general meetings.
The legislation still needs to be formally introduced in the National Assembly, and a sponsoring lawmaker has yet to be confirmed. Given mixed reactions within political circles, the bill could face debate before any final approval.
Major Korean Crypto Exchanges Face Structural Changes
If enacted, the 20% shareholder cap would significantly impact South Korea’s largest cryptocurrency exchanges, many of which currently exceed the proposed limit.
Upbit chairman Song Chi-hyung reportedly owns approximately 25.52% of the company. Bithumb Holdings controls around 73.56% of Bithumb. Coinone chairman Cha Myung-hoon holds roughly 53.44%, while Mirae Asset Consulting is expected to own about 92.06% of Korbit following a recent acquisition. Binance also holds an estimated 67.45% stake in GOPAX.
Upbit and Bithumb together account for nearly 90% of South Korea’s crypto trading volume, making the proposed reform particularly significant for the country’s digital asset market.
Supporters argue that limiting major shareholder control could improve corporate governance and reduce systemic risks within the fast-growing crypto industry. By preventing excessive concentration of power, regulators aim to create a more balanced and transparent market environment.
However, critics warn that the measure could have unintended consequences. Industry insiders have described the policy as unprecedented globally, suggesting it may discourage investment, limit competition and slow innovation. Some lawmakers have also voiced concerns that overly restrictive ownership rules could create higher barriers to entry for new players rather than lower them.
Part of a Broader Crypto Regulatory Tightening
The shareholder cap proposal comes amid broader efforts by South Korean authorities to tighten oversight of the virtual asset sector.
Earlier this year, the National Assembly approved revisions to the country’s crypto licensing framework, introducing stricter entry requirements for virtual asset service providers (VASPs). The updated rules expand regulators’ authority to screen executives and major shareholders for violations such as tax evasion, fair-trade breaches, drug trafficking and serious economic crimes.
In addition, Democratic Party lawmaker Kim Seung-won recently announced plans to amend the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users. The proposed amendments would require individuals who provide investment advice or promote trading in financial products or digital assets to disclose relevant information, further strengthening investor protection.
Taken together, these developments signal that South Korea is entering a new phase of crypto regulation — one focused not only on compliance and licensing, but also on ownership structure and corporate governance.
