Crypto Exchange Rules Risk Setting Dangerous Precedent

Cryptocurrency exchanges are products of technological innovation born in the private sector. Yet the government has suddenly labeled exchanges as "public infrastructure" and is reviewing restrictions on major shareholders' ownership stakes similar to those for financial institutions, sparking intense controversy.

Such measures appear to aim for market stability at first glance. However, regulating major shareholders' stakes directly constrains "control rights" and "disposal rights"—core shareholder entitlements—concealing dangerous logic that threatens the foundation of private property rights guaranteed by the Constitution. "Public infrastructure" is not a "magic word" that applies anywhere. Traditional public infrastructure refers to sectors that collect customer funds like banks granted exclusive business rights by the state, or areas where massive public funds are injected.

Cryptocurrency exchanges are "private businesses" that grew organically through creative ideas and risk-taking in the private sector, and unlike banks, they have no fund-raising function. Imposing retroactive regulations by labeling private enterprises as public infrastructure merely because the market has grown sets a dangerous, extra-constitutional precedent that the state can interfere with private ownership at will whenever it deems necessary.

Article 13, Paragraph 2 of the Constitution stipulates that "no citizen shall have their property rights deprived by retroactive legislation." While retroactive laws such as civil service pension reforms and the excess land profits tax have been enacted in the past, these were exceptions limited to cases of "extremely grave public interest." Whether concentrated stock ownership in exchange corporations—which can also serve as the basis for accountable management—constitutes such "extremely grave public interest" requiring state intervention is questionable.

Article 15 of the Constitution stipulates that "all citizens shall have the freedom to choose their occupation." This ensures the economic foundation of our lives and the core of self-realization, maintaining human dignity. Article 23, Paragraph 1 establishes the "inviolability of property rights." Shareholders freely owning their stakes in corporations and exercising their rights as owners is the essence of property rights and the core of capitalist economic order. Article 37, Paragraph 2 specifies that even when restricting citizens' freedoms and rights, "their essential content cannot be violated," establishing the "principle of proportionality."

Proper balance must be achieved between the public interest pursued and private interests infringed, and the least invasive means must be chosen to achieve objectives. Market opacity and major shareholders' self-dealing can be adequately addressed through operational regulations, transparent disclosure systems, and strict penalties. Nevertheless, directly touching the "ownership structure" itself—the foundation of enterprises—frontally violates the "principle of minimum infringement" among proportionality principles.

The ruling party and government are reportedly considering a 20% ownership cap with a three-year grace period in light of deteriorating public opinion. A three-year grace period does not change the fundamental nature of the issue. Now is the time to consider effective operational regulations that can strengthen market trust while respecting private property rights—not to forcibly paint exchanges with the label of "public."

Attempts to restructure corporate ownership and governance to suit state preferences will only block technological innovation, dampen private capital's investment appetite, create reverse discrimination against foreign capital, and erode the competitiveness of the domestic virtual asset industry. Regulation should be a compass guiding safe navigation, not shackles restraining innovation.