Financial authorities are reportedly considering including a proposal to raise the stake of major shareholders in major domestic virtual currency exchanges to 15-20% in the Framework Act on Digital Assets (Phase 2 Virtual Assets Act). Given that major shareholders in all four major domestic exchanges already exceed this threshold, the adoption of this measure is expected to shake the very foundations of their governance structures. In particular, it is expected to pose a new challenge to the merger between Naver and Dunamu, which are currently pursuing a stock swap.
According to the financial world on the 30th, the Financial Services Commission submitted the 'Digital Asset Basic Law Regulation Key Contents (Draft)' containing these contents to the Democratic Party's Digital Asset Task Force (TF) last week.
According to the report, the Financial Services Commission pointed out that “the ownership structure of major domestic virtual currency exchanges, in which operating profits are concentrated in the hands of specific individuals (a small number of founders and shareholders), must be improved,” and suggested that a “major shareholder eligibility review system” equivalent to the level of an alternative trading system (ATS) under the Capital Market Act be established.
Specifically, the proposal limits the ownership distribution of major shareholders to 15-20%. Under the current Capital Markets Act, alternative exchanges cannot own more than 15% of voting shares, including those held by related parties.
If these standards are finalized, Dunamu, the operator of Upbit, Korea's leading exchange, could be hit the hardest. Dunamu Chairman Song Chi-hyung currently holds a 25% stake. If the government's proposal is implemented, Chairman Song could be forced to sell up to 10% of his shares.
The same holds true for other exchanges, including Bithumb and Coinone. Bithumb is 73% owned by Bithumb Holdings, while Coinone is 54% owned by Chairman Cha Myung-hoon.
However, the second stage of legislation, including regulations on the holdings of major shareholders of exchanges, has not yet been finalized by the government.
- Reporters Park Min-joo, Kim Jeong-woo, and Do Ye-ri
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