South Korea has proposed limiting the ownership stake of major shareholders in four large cryptocurrency exchanges (Upbit, Bithumb, Coinone, Korbit) to 15%–20% to prevent a small group from controlling the exchanges' operations.
The draft Basic Act on Digital Assets, submitted to the National Assembly by the South Korean Financial Services Commission (FSC), could force founders and major shareholders to adjust their holdings, alter governance structures, and raise concerns about the extent of state intervention.
- The FSC proposed a ceiling of 15%–20% ownership for major shareholders in Upbit, Bithumb, Coinone, and Korbit.
- The chairman of Dunamu ( Upbit parent company) may have to sell around 10% of his shares.
- The industry is concerned about the risks of excessive regulation and disruption to corporate governance.
Proposal to limit major shareholder ownership to 15%–20%
In its draft Basic Act on Digital Assets, the FSC proposes limiting the ownership stake of major shareholders in South Korea's four largest cryptocurrency exchanges to between 15% and 20%.
The aim of the measure is to prevent a select few founders and shareholders from controlling the exchange's operations. The list of exchanges mentioned includes Upbit, Bithumb, Coinone, and Korbit, all of which are large exchanges in the domestic market.
If implemented, the regulation would directly impact ownership structure, leading to adjustments in voting rights and governance mechanisms. This is described as a way to reduce the risk of concentrating power in the hands of a dominant group of shareholders.
Expected impact: existing shareholders may have to divest Capital.
If the proposal is implemented, Song Chi-hyung, chairman of Upbit 's parent company Dunamu, could be forced to sell approximately 10% of his shares.
Bithumb, Coinone, and other platforms are also expected to face significant changes in their governance structure, due to having to adjust the ownership ratio of major shareholders to the 15%–20% threshold as stated in the draft.
Concerns have emerged within the industry that these limits could be XEM as excessive regulation. These worries center on the risk of increased government intervention and disruption to corporate governance at major cryptocurrency exchanges.
