South Korea Proposes Crypto Exchange Ownership Caps, Threatening Major Deals

South Korea's Financial Services Commission (FSC) has proposed a significant regulatory change, limiting major shareholders of the top five cryptocurrency exchanges to ownership stakes between 15% and 20%. This move, intended to transform exchanges into quasi-public infrastructure similar to Alternative Trading Systems (ATS), forces founders and controlling shareholders to divest large portions of their holdings, potentially requiring divestments of 33% to over 58% depending on the exchange.

The proposal immediately jeopardizes major corporate activities, including Naver's planned merger with Dunamu (Upbit's parent company) and Mirae Asset's acquisition of Korbit. Furthermore, the FSC is shifting from a registration system to a full-licensing regime, subjecting major shareholders to fitness reviews typically reserved for traditional financial institutions. Conversely, the proposal may ease the strict separation between traditional finance and crypto, potentially allowing banks and asset managers to invest in exchanges.

Industry leaders have strongly criticized the move, arguing it infringes on property rights, destabilizes corporate governance by removing accountable shareholders, and could benefit foreign competitors. While the FSC notes the proposal is not final and a transition period might be granted, the industry faces its most significant structural transformation in years.

(Source：BeInCrypto)