South Korea’s top financial regulator has publicly supported ownership limits for cryptocurrency exchanges as lawmakers finalise the Digital Asset Basic Act ahead of a mid-February deadline.
The Financial Services Commission signalled a firmer stance on governance reform, aligning crypto platforms more closely with traditional securities market oversight.
According to local media reports, the regulator views licensed crypto exchanges as market infrastructure rather than ordinary private companies.
Financial Services Commission Chair Lee Eog-weon said exchanges should operate under rules reflecting their growing systemic importance.
Lee noted that exchanges play a central role in price discovery, custody, and trading for digital assets used by millions of retail investors.
The regulator is reviewing proposals to cap major shareholders’ ownership stakes at roughly 15% to 20%.
These limits mirror ownership restrictions already applied to securities exchanges and alternative trading systems in South Korea.
Exchange operators have pushed back against the proposal, warning it could disrupt existing governance structures.
Concerns have also emerged within the ruling Democratic Party over how far the reforms should go.
Despite resistance, Lee’s comments mark the clearest endorsement yet from the Financial Services Commission.
The ownership cap proposal was included earlier this month in a policy coordination document submitted to the National Assembly.
Yonhap News Agency reported that the document described crypto exchanges as core infrastructure for the digital asset market.
Lawmakers argued that concentrated ownership could undermine transparency and market integrity.
The proposed framework would move exchanges from a renewable notification system to a formal authorisation regime.
Under the current system, crypto exchanges must renew their operating status every three years.
The new authorisation regime would grant more durable licences but impose stricter governance requirements.
Lee said this shift justified stronger rules on ownership limits and shareholder suitability reviews.
Domestic exchanges have warned that such changes could force major restructuring.
The Korea Times reported that Dunamu Chair Song Chi-hyung and related parties control more than 28% of the firm’s shares.
Coinone founder Cha Myung-hoon reportedly holds a majority stake of around 53% in the exchange.
Analysts say the proposed cap could significantly alter ownership at South Korea’s largest crypto platforms.
The reforms may also affect exchanges’ ability to attract long-term strategic investors.
Lawmakers stressed that negotiations over the bill are still ongoing.
Maeil Business Newspaper reported that the Democratic Party plans to introduce the Digital Asset Basic Act before the Lunar New Year on 17 February.
Sensitive provisions, including shareholder caps and the central bank’s role, remain under discussion.
The bill has already faced delays due to disagreements over stablecoin regulation.
Lawmakers have agreed on a minimum capital requirement for stablecoin issuers.
The threshold has been set at 5 billion won, or approximately $3.7 million.
Despite progress on other sections, ownership caps remain one of the most contentious elements.
The bill must still pass committee review and a National Assembly vote before becoming law.