South Korea Plans Cap On Crypto Exchange Ownership Despite Industry Concerns
South Korea’s Financial Services Commission (FSC) has shared its intention to maneuver ahead with the proposed cap on crypto alternate possession regardless of considerations from trade gamers and the ruling Democratic Party of Korea (DPK).
FSC Backs Ownership Cap For Crypto Exchanges
On Wednesday, Financial Services Commission Chairman Lee Eog-weon revealed that the regulatory company is reviewing a proposal to cap main shareholders’ stakes in crypto exchanges at round 15%-20%.
According to The Korea Times, Lee stressed the necessity to restrict the possession stakes of controlling shareholders in crypto exchanges, claiming that the transfer is critical to “align governance requirements with the exchanges’ rising public position.”
He argued that “extreme focus of possession” might improve the danger of conflicts of curiosity whereas undermining market integrity, noting that securities exchanges and different buying and selling techniques are topic to related limits.
The chairman highlighted that current regulations primarily deal with anti-money laundering and investor safety. The possession cap proposal can be included within the upcoming Digital Asset Basic Act, often known as the Second Phase of the Virtual Asset User Protection Act, which is anticipated to function a complete framework for the whole trade.
“Under the present system, digital asset exchanges function underneath a notification system that requires renewal each three years. The proposed shift to an authorization system would successfully grant exchanges everlasting working standing,” Lee defined.
He emphasised that “this increased standing means exchanges want governance guidelines that match their bigger position and larger obligations.” As a consequence, exchanges would assume traits just like public infrastructure.
A joint council representing home crypto exchanges, together with Upbit, Bithumb, and Coinone, has opposed the proposed cap, warning that it might hinder the development of South Korea’s digital asset sector.
Notably, main gamers like Song Chi-hyung, the chairman of Dunamu, the corporate that operates Upbit, and Cha Myung-hoon, the founding father of Coinone, can be compelled to promote important parts of their holdings if the regulation is enacted.
The Democratic Party of Korea additionally expressed its considerations, observing that related possession caps are unusual worldwide and will make South Korea’s framework inconsistent with world regulatory traits.
Lawmakers Set New Deadline For Digital Assets Framework
ChosunBiz reported that the DPK’s Digital Assets Task Force (TF) mentioned key particulars of the Digital Asset Basic Act in a Wednesday assembly on the National Assembly members’ workplace constructing, attended by authorities officers.
According to the report, the ruling social gathering’s members didn’t focus on the cap on crypto alternate possession. Still, they revealed that they’ll introduce the framework earlier than the Lunar New Year vacation on February 17.
DPK’s Lawmaker Ahn Do-geol mentioned, “We plan to introduce the Digital Asset Basic Act earlier than the Lunar New Year, and we hope that by then a plan agreed upon with the federal government as a lot as attainable shall be put collectively.”
Instead of the “unanimous consent system” proposed by the Bank of Korea (BOK), the duty drive settled on a consultative physique to debate stablecoin authorizations, comprised of the BOK, the FSC, the Ministry of Economy and Finance, and the Financial Supervisory Service.
The activity drive thought of that requiring unanimity for stablecoin authorization would sluggish issuance, whereas observers consider that the central financial institution’s proposal was “a solution to management stablecoins.”
In addition, the minimal statutory capital for stablecoin issuers was set at 5 billion gained, roughly $3.48 million. Nonetheless, the report affirmed that there has not been an settlement on the issuance of won-pegged stablecoins.
As reported by Bitcoinist, the BOK and the FSC have been clashing over the extent of banks’ position in stablecoin issuance. While the central financial institution has been pushing for a consortium of banks proudly owning a minimum of 51% of any stablecoin issuer looking for approval within the nation, the FSC has expressed considerations about this proposal.
Lee Kang-il, a DPK lawmaker on the duty drive, asserted that “the 50%+1 share rule stays contentious as a result of there may be nonetheless no willingness to concede amongst authorities ministries,” however added that they’ve ready a mediation plan and can “make selections in a path that serves the nationwide curiosity total and advantages the general public.”
