South Korea moves to cap crypto exchange ownership

South Korea’s Financial Services Commission has proposed capping individual shareholdings in domestic crypto exchanges at between 15% and 20%, arguing the platforms now function as public financial infrastructure.

The regulator said the limits are intended to prevent conflicts of interest as crypto exchanges become embedded in the financial system and subject to closer oversight.

“As crypto exchanges are now officially recognised as part of the financial system, we must create a governance structure that befits their status,”

Said FSC chair Lee Eok-won, according to local media.

The proposal has triggered opposition from government and industry figures, with the ruling Democratic Party declining to include ownership caps in its draft Basic Digital Asset Act.

The FSC has insisted the cap should apply not only to individuals but also to related entities, setting up a direct clash with lawmakers who want to prioritise stablecoin rules.

Most major South Korean exchanges would be forced to restructure under the plan, as founders or single companies currently control large stakes in platforms such as Upbit, Korbit, GOPAX and Coinone.

Industry insiders warned the standoff could lead to prolonged regulatory friction, with one source saying regulators remain “very firm” despite resistance from political and corporate groups.