Financial regulators and the ruling party have agreed to cap major shareholder stakes at cryptocurrency exchanges at 20%. The move aims to strengthen governance rules by treating exchanges as quasi-financial institutions serving as public infrastructure.
According to financial industry sources on the 4th, the Financial Services Commission and the Democratic Party of Korea's Digital Asset Task Force are in final-stage discussions on the Digital Asset Basic Act. A source familiar with the discussions said, "The TF reached a partial consensus yesterday on a 20% cap on major shareholder stakes with a three-year grace period," adding, "The exact figures will be finalized through party-government consultations."
Sources within the FSC and the Democratic Party indicate that while the cap will be set at 20%, holdings of up to 34% may be permitted through enforcement decrees for exceptions determined by the FSC. This appears to reflect concerns that overly restrictive limits could block new market entrants.
The stake restrictions will take effect three years after the law's implementation, providing a sufficient transition period. Exchanges with smaller market shares, including Coinone, Korbit, and Gopax, may receive an additional three-year extension, potentially extending the grace period to a maximum of six years. A Democratic Party TF advisor said, "Even if a unified proposal between the party and the FSC is prepared, it is not guaranteed to pass the National Assembly. Sufficient communication on major issues is necessary."
The cryptocurrency industry maintains that major shareholder stake restrictions are excessive. While enforcement decrees may allow stakes up to 34%, only exceptional cases are likely to be approved. Although regulators have made concessions to avoid hindering innovation at new firms, major exchange shareholders may face situations requiring them to sell their stakes. An official at a cryptocurrency exchange argued, "This infringes on property rights."
Financial authorities have decided to maintain existing criteria for stablecoin issuance. The FSC is reviewing a structure for won-based stablecoins where issuance would be handled by consortiums in which banks hold more than 50% plus one share. This is interpreted as an effort to secure reliability and payment capability during initial issuance stages. An FSC official said, "We have decided to maintain the major shareholder stake restrictions and the bank-centered approach to won stablecoin issuance."
The FSC is also considering potential linkages with stablecoins in designing the security token system. Security tokens are digital securities issued and managed on blockchain technology. Stablecoins are being discussed as a settlement method for security token transactions.
FSC Chairman Lee Eog-weon said on the 4th, "Some overseas markets are attempting to support 24-hour, same-day settlement of securities through systems that settle security tokens with stablecoins." He explained, "This maximizes settlement efficiency through 'on-chain settlement,' where securities and payment methods are processed on the same blockchain."
If such a structure is introduced, same-day fund receipt would become possible, replacing the current system where withdrawal is available only two days after selling securities. Chairman Lee said, "We will design the security token system and infrastructure while considering linkages with stablecoins to be introduced through National Assembly discussions on the Digital Asset Act, as well as future scalability."
Attention is also focused on whether the legislation will include provisions for continuous verification that exchanges' actual holdings match their book balances, following Bithumb's erroneous payment incident involving 620,000 Bitcoin. Calls for related regulations have grown after Bithumb paid out "phantom coins" it did not actually hold. However, given that exchange inspections are currently underway, discussions suggest first having exchanges voluntarily establish real-time continuous verification systems, with institutional improvements to be considered if necessary.
Meanwhile, controversy continues over vulnerabilities in cryptocurrency exchanges' asset audit methods. Exchanges do not specifically disclose deposited assets and actual holdings volumes, and with audits conducted voluntarily, some exchanges are skipping public disclosure of audit reports.
In practice, the quarterly asset audit reports that Korea's five major cryptocurrency exchanges publish through external accounting firms do not reveal customer deposit volumes or the actual amount of cryptocurrency held by exchanges. Instead of disclosing each figure, they only indicate whether the ratio of held assets to customer deposits exceeds 100%.
