SEOUL, January 29 (AJP) - South Korea’s Financial Services Commission (FSC) is again pushing to limit major shareholders’ stakes in cryptocurrency exchanges, arguing the platforms function as public infrastructure as they move into a fully regulated licensing system.
The proposal has drawn attention over whether it will be reflected in the Digital Asset Basic Act being prepared by the ruling Democratic Party, as industry groups warn that forcing large shareholders to sell would infringe on property rights.
FSC Chairman Lee Eok-won said at a news briefing on Tuesday that regulators are considering ownership caps in connection with the Digital Asset Basic Act, citing the “public-infrastructure nature" of crypto exchanges and their entry into the regulated system through an approval-based licensing regime.
“How we design the new framework is important,” Lee said.
Lee added that concentrated control by a specific shareholder could create conflicts of interest, saying regulators and the ruling party share a sense of the need for reform and are in close discussions on how to proceed.
The government and the ruling party plan to use the Digital Asset Basic Act to broadly overhaul digital-asset regulation, including rules for stablecoins, the classification of digital-asset businesses, and licensing and approval requirements.
Crypto exchanges currently operate under a partial regulatory framework based on a three-year reporting system. Under a new approval-based regime, exchanges would gain permanent operating status. Regulators say they want to establish a more dispersed ownership structure as exchanges are formally brought into the regulated system, in order to strengthen public accountability and responsible management.
With regulators reviving the ownership-cap proposal, attention is focused on whether they can reach consensus with the Democratic Party. Lawmakers across party lines have previously raised concerns that government intervention in the governance of private companies could be excessive.
Lee Jung-moon, a lawmaker who leads the Democratic Party’s digital-asset task force, said on Tuesday that while there is broad agreement on the principle of limiting major shareholders’ stakes, there are differing views on whether such limits should be written directly into legislation. He said he would gather opinions within the party.
If the plan is legislated, all five major won-denominated cryptocurrency exchanges would be required to reduce major shareholders’ stakes. The FSC has proposed capping such holdings at 15 to 20 percent.
The Digital Asset eXchange Alliance (DAXA), an industry body representing major exchanges, has strongly opposed the proposal.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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