South Korea to cap crypto exchange ownership at 20%

South Korea will cap major shareholder stakes in crypto exchanges at 20%, with a three-year grace period and possible exceptions up to 34%. The move aims to reduce concentrated ownership and improve governance.

South Korea is preparing to implement a 20% ownership cap for major shareholders in cryptocurrency exchanges under the Digital Asset Basic Act. This initiative, developed by the ruling party's digital asset task force and the Financial Services Commission, seeks to reduce concentrated ownership and strengthen governance within the crypto industry. Leading exchanges such as Upbit and Bithumb, which currently have highly concentrated ownership structures, will be given three years to comply with the new regulation. Smaller exchanges may benefit from an additional three-year grace period to meet the requirements. Exceptions allowing up to 34% ownership may be granted for new businesses or with regulatory approval. This regulation is expected to reshape the ownership landscape of South Korea’s crypto exchanges, promote fairer decision-making, and enhance investor protection.