South Korea's Financial Services Commission has reaffirmed its plan to cap major shareholders' stakes in cryptocurrency exchanges. The bank-led consortium framework for stablecoin issuance will also remain intact.
The regulator appears to have solidified its view that financial institution-level regulations are necessary, following Bithumb's "60 trillion won phantom coin" incident and a recent payment failure at Naver Pay, which has been preparing to launch a won-denominated stablecoin business.
The FSC held a closed-door meeting with domestic cryptocurrency industry representatives on Wednesday at the Seoul Government Complex, chaired by Vice Chairman Kwon Dae-young. At the meeting, authorities indicated they will proceed as planned with provisions in the Digital Asset Basic Act to limit exchange major shareholders' stakes to 15-20%, sources said. The government bill is expected to be submitted to the National Assembly between late this month and early next month.
Authorities maintain that exchanges should bear social responsibilities and public interest obligations comparable to financial institutions. They believe ownership structures should be reorganized accordingly. If the major shareholder stake regulations take effect, leading exchanges will be required to reduce their controlling shareholders' holdings.
"If the major shareholder stake limits are ultimately implemented, exchanges' governance structures will inevitably change significantly," a financial industry official said. "A complete reshuffling is about to begin."
The FSC also maintained its existing position on requirements for issuing won-denominated stablecoins. Only consortiums in which banks hold majority stakes (50% plus one share) will be permitted to issue such coins.
"Considering that won-denominated coins could be used for payments and settlements, stability is paramount," another financial industry official said. "The financial authorities seem intent on starting with banks to minimize money laundering risks and ensure stability."
CEOs and executives from the five major exchanges attended Wednesday's meeting, including Oh Kyung-suk of Dunamu (operator of Upbit), Lee Jae-won of Bithumb, and Cha Myung-hoon of Coinone.
"The meeting lasted about an hour and a half, but it essentially felt like a session to officially reiterate the government's existing position to industry representatives," an industry official said.
