South Korea Weighs 15%-20% Crypto Exchange Ownership Cap

By Tom Whitfield

South Korea's Financial Services Commission (FSC) is considering a 15% to 20% ownership ceiling for major shareholders in crypto exchanges, according to a government proposal. The FSC is reconciling differences among ministries, and the measure is expected to advance as a lawmaker-sponsored bill. Introduction is targeted for this month.

What could the ownership ceiling change?

If adopted, the proposal would require major shareholders above the selected limit to reduce their stakes. Existing platforms could receive one to two years to sell shares above the threshold, giving current owners time to restructure rather than dispose of their positions immediately.

Officials are also considering an alternative that would restrict shareholders' voting rights while leaving ownership stakes untouched. That option addresses concerns over property rights. For exchanges and their investors, the two designs would produce different outcomes: an ownership cap would require asset sales, while a voting-rights limit would separate economic exposure from formal control.

For scale, 15% equals roughly one-sixth of an exchange's equity, while 20% equals one-fifth. The range remains unsettled. The ownership ceiling was among the unresolved provisions in earlier coverage of South Korea's digital asset bill, and the FSC has not yet reconciled every ministry position. The final percentage will determine which investors need to reduce holdings or surrender voting influence.

How would licensing change exchange operations?

The broader proposal would move crypto exchanges from a reporting framework to a licensing system. For operators, that shifts the supervisory basis from reporting toward requirements for continued authorization. The change could make compliance failures more consequential because operating status would depend on meeting the licensing standard.

The bill could also impose no-fault compensation liability on exchanges affected by hacks or system failures. Customer claims could arise even without proof that the operator caused the incident, placing compensation costs directly into exchange operating risk. The standard would apply to losses arising from the qualifying failures.

Failure to meet requirements to hold users' crypto assets could become grounds for suspending operations. The proposal would connect a failure to meet custody requirements with the exchange's operating status. Exchanges would need to address both the rules for holding customer crypto and the consequences of noncompliance before regulators determine whether they can continue operating.

Who would lead stablecoin issuance?

For stablecoins, officials expect a bank-centered consortium, and the Bank of Korea (BOK) has said banks should lead issuance. That gives banks a leading institutional role in the proposed stablecoin structure. The arrangement differs from the ownership proposal because it addresses issuance rather than who controls an exchange.

The stablecoin arrangement and exchange ownership rules address separate structural questions. One determines who leads issuance; the other determines how much equity and voting influence a shareholder can retain. The proposal's introduction this month opens the next decision window, but it does not settle the final ownership threshold, divestment period or liability standard.

The next checkpoint is lawmaker review after this month's introduction, when the final threshold, divestment window and licensing terms will determine how quickly ownership and custody rules reshape exchange operations.