South Korea Plans to Limit Shareholdings in Cryptocurrency Exchanges

South Korea plans to limit crypto exchange shareholdings to 20%.

South Korean authorities have agreed on a plan to reduce the stakes of majority shareholders in cryptocurrency exchanges to 20%, according to local media. 

Exceptions may be made for new market entrants, allowing them to hold up to 34%. This threshold aligns with the Commercial Code, which stipulates that 33.3% of votes are sufficient to block decisions at a general shareholders’ meeting.

If the law is enacted, exchanges will have three years to adjust their ownership structures to meet the new requirements. This affects Upbit and Bithumb, which control about 90% of the South Korean market. Smaller platforms will be granted an additional three-year grace period. 

Current Situation 

The current ownership structures of the largest local trading platforms exceed the proposed limit:

• Upbit chairman Song Chi-hyung owns about 25.52%;
• Bithumb Holdings controls approximately 73.56% of Bithumb;
• Mirae Asset Consulting will acquire about 92.06% of Korbit after a deal;
• Binance owns around 67.45% of GOPAX.

The Future  

Despite gaining support among regulators, the bill faces a long path to enactment. It must first be introduced to the National Assembly by a member of parliament, though it remains unclear who will do so. 

Subsequent approval may encounter resistance, as some lawmakers, including those from the ruling party, have already expressed doubts about the necessity of such stringent restrictions.

Local media have warned that the new measures could impact competition: 

“This is an unprecedented practice globally, contradicting international approaches. If regulation is too strict, it will lead to serious consequences—limiting competition, slowing innovation, and creating high barriers to market entry.”

Tightening Regulations 

Earlier this year, the National Assembly tightened licensing requirements for VASP. Regulators gained the ability to scrutinize executives and majority shareholders for involvement in a broader range of violations—from drug trafficking and tax evasion to antitrust and serious economic crimes.

In February, lawmaker Kim Seung-won announced the next step. Amendments to the Capital Markets Act and the Virtual Asset User Protection Act will require disclosure of those providing investment advice or promoting trading of financial products and cryptocurrencies.

Back in January, South Korea lifted the ban on corporate investments in cryptocurrencies.