South Korea Proposes Crypto Exchange Ownership Caps, Threatening Major Deals
South Korea’s Financial Services Commission (FSC) has reportedly proposed limiting main shareholders of cryptocurrency exchanges to 15-20% possession stakes, a regulatory bombshell dropped on December 30-31 that’s now casting an extended shadow over the business’s outlook for 2026.
The proposal would pressure the founders and controlling shareholders of Korea’s high 5 exchanges to divest important parts of their holdings.
A New Year Clouded by Uncertainty
The timing of the announcement—simply days earlier than the brand new 12 months—has left business individuals scrambling to evaluate the implications. A neighborhood media outlet first broke the story on December 30, which was subsequently lined by main monetary shops. What was anticipated to be a celebratory interval marking one other 12 months of progress in one of many world’s most lively crypto markets has as a substitute grow to be a interval of anxious hypothesis about the way forward for trade possession buildings.
“The business entered 2026 underneath a cloud of regulatory uncertainty,” one trade government advised reporters. “Deals that had been on the verge of closing are actually again on the drafting board.”
Sweeping Changes to Governance
Under the proposed Digital Asset Basic Act, the FSC goals to remodel crypto exchanges from founder-controlled personal enterprises into quasi-public infrastructure, much like Alternative Trading Systems (ATS) underneath Korea’s Capital Markets Act.
The influence can be rapid and far-reaching:
| Exchange | Largest Shareholder | Current Stake | Required Divestment |
|---|---|---|---|
| Upbit (Dunamu) | Founder (Song Chi-hyung) | 25.52% | 5-10% |
| Bithumb | Bithumb Holdings | 73.56% | 53-58% |
| Coinone | Founder (Cha Myung-hun) | 53.44% | 33-38% |
| Korbit | NXC | 60.5% | 40-45% |
| GOPAX | Binance | 67.45% | 47-52% |
The proposal additionally indicators a shift from the present registration system to a full-licensing regime, with regulators conducting health critiques of main shareholders—a degree of scrutiny beforehand reserved for conventional monetary establishments.
Mega-Deals in Limbo
Two of probably the most important company developments in Korea’s crypto sector now face main issues.
Naver’s planned merger with Dunamu, which might create a fintech large valued at roughly 20 trillion received ($14 billion), is instantly affected. The present construction—the place Naver Pay would maintain 100% of Dunamu—is basically incompatible with the proposed possession caps.
Similarly, Mirae Asset’s acquisition of Korbit, for which a memorandum of understanding was lately signed with main shareholders NXC and SK Planet, faces an unsure path ahead. Industry observers be aware that investing over 100 billion received with out securing administration management undermines the strategic rationale for the deal.
Relaxing the Wall Between Finance and Crypto
One important side of the proposal includes easing Korea’s strict separation between conventional finance and digital asset companies.
Since late 2017, when the federal government imposed sweeping cryptocurrency laws amid a speculative frenzy, authorities have maintained the unwritten rule. It bars banks, insurers, and different monetary establishments from investing in or partnering with crypto companies—a coverage designed to insulate the normal monetary system from the volatility and dangers of digital belongings. While by no means codified into legislation, this precept has successfully saved established monetary gamers on the sidelines of Korea’s booming crypto market.
The FSC now seems to acknowledge that reaching possession dispersion whereas sustaining market stability requires participation from established monetary establishments. This may open the door for securities companies and asset managers to take stakes in exchanges, doubtlessly accelerating institutional adoption and the event of safety token choices (STO) and real-world asset (RWA) tokenization.
Industry Pushback
Exchange operators have responded with sharp criticism. Key issues embody the potential disappearance of accountable controlling shareholders, which may create ambiguity about accountability when issues come up. Some argue that behavioral laws and voting rights restrictions can be extra applicable than compelled dispersion of possession.
There are additionally fears that domestic-only restrictions may inadvertently profit international rivals, with abroad platforms gaining market share whereas Korean exchanges battle to restructure.
“The authorities is trying regulation that goes far past market tips,” one business consultant stated. “Legislation meant to advertise the digital asset business and shield customers may find yourself infringing on property rights and destabilizing company governance.”
Global Implications
Korea’s proposal comes amid a broader regional push to formalize the governance of crypto exchanges. Indonesia launched the world’s first state-backed cryptocurrency bourse in 2023, with laws limiting cross-ownership between exchanges to twenty%. Vietnam launched a licensing regime in September 2025 requiring a minimal capital of $378 million and capping international possession at 49%.
However, Korea’s method goes additional by focusing on current market leaders reasonably than simply setting guidelines for brand spanking new entrants. Forcing founders of established exchanges to divest important stakes is unprecedented amongst main crypto markets. With 11 million registered customers, Korea’s experiment in retroactive possession dispersion will probably be carefully watched by regulators elsewhere grappling with how you can impose public-utility-style governance on personal platforms which have already achieved dominance.
What Comes Next
The FSC has emphasised that the proposal isn’t last, with officers stating that particulars together with particular possession thresholds stay underneath dialogue. Legal consultants counsel a transition interval of 5-10 years might be granted to permit gradual compliance.
For now, the Korean crypto business enters 2026 dealing with the prospect of its most important structural transformation because the first exchanges launched 13 years in the past. The coming months will decide whether or not this reshaping strengthens the market’s foundations or disrupts the momentum that made Korea a worldwide crypto powerhouse.
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