South Korea proposes limits on shareholding ratios in stock exchanges

Key details and reasons

The FSC's draft aims to concentrate ownership in exchanges serving more than 11 million users — classifying them as critical national infrastructure. The plan is as follows:

• Major shareholders (founders, controlling entities, or those with real influence) will be limited to 15-20% of the voting shares.

• Holdings exceeding this level would require divestment, possibly through sale, dilution, or restructuring.

• A system for vetting major shareholders would assess their competence, criminal record, governance, and internal controls— reflecting the oversight applied to traditional financial institutions.

• The transition from the current registration system to a full licensing system will give regulatory authorities greater powers to refuse or revoke approvals.

The FSC argues that founder-dominated structures concentrate enormous operating profits (fees) in the hands of a few individuals, raising concerns about accountability, transparency, and potential conflicts of interest. This proposal is inspired by existing rules of the Capital Markets Act, which limit voting power in alternative exchanges to 15% (with some exceptions of 30%).

The purpose of stock ownership limits

Under the proposed framework, major shareholders—especially founders, executives, or affiliated entities—would be subject to limits on their shareholdings in cryptocurrency exchanges. While the specific thresholds are yet to be finalized, the purpose is clear: to prevent excessive concentration of power and minimize conflicts of interest.

This approach reflects long-standing rules in the traditional financial sector, where banks, securities firms, and insurance companies must adhere to strict ownership and control limits to ensure operational independence and financial stability.

Our review

South Korea's proposed 15-20% ownership limit is a bold attempt to decentralize control of the country's leading cryptocurrency exchanges — transforming them from founder-run businesses into more accountable, infrastructure-like entities. While aimed at increasing transparency and reducing risk, the measure threatens to disrupt established structures, halt major deals, and potentially slow industry growth.

When the Digital Asset Basic Act is passed in early 2026, the final ownership threshold, transition periods (potentially 5-10 years for compliance), and exceptions will be crucial. The FSC has stressed that this proposal is still under discussion, with input from stakeholders ongoing. For South Korea's cryptocurrency ecosystem—one of the most dynamic in the world—this debate highlights the tension between strict regulation and innovation.

The outcome will shape the future of Upbit, Bithumb, and beyond — and influence how major Asian markets balance regulation and growth. Stay tuned for updates from the FSC and DAXA; the next few months could redefine ownership in one of the most dynamic cryptocurrency jurisdictions.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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