South Korea’s government and ruling Democratic Party have reportedly agreed to cap major shareholder stakes in domestic cryptocurrency exchanges at 20% as part of new industry regulations.
The Democratic Party’s digital asset task force and the Financial Services Commission (FSC) reached the agreement following policy discussions, according to a report by local media outlet Herald Economy.
“This is unprecedented worldwide and has low global consistency. If it is excessively introduced, it could have serious negative effects such as limited competition, slowed innovation, and strengthened barriers to entry,”
An industry insider told the outlet.
Under the proposal, crypto exchanges would have three years after the law’s implementation to adjust their ownership structures, while smaller platforms may receive an additional three-year grace period.
Major exchanges including Upbit and Bithumb, which together account for roughly 90% of South Korea’s crypto trading market, currently exceed the proposed ownership threshold.
Upbit chairman Song Chi-hyung holds around 25.52%, while Bithumb Holdings controls about 73.56% of Bithumb, and other exchanges such as Coinone, Korbit and GOPAX also have majority shareholders above the proposed cap.
The plan forms part of broader regulatory tightening after South Korea introduced stricter licensing rules for virtual asset service providers earlier this year, including expanded background checks for executives and major shareholders.