South Korea Eyes 20% Ownership Limit for Crypto Exchanges

Highlights:

• South Korea plans to limit major shareholders in crypto exchanges to address governance risks.
• Bithumb and Gopax may need ownership restructuring when the proposal passes.
• The Digital Asset Basic Act will also address stablecoins and crypto ETFs when passed.

South Korean lawmakers and financial regulators agreed to limit large shareholder stakes in cryptocurrency exchange operators, according to the Korea Herald. The proposal sets a 20% cap for major shareholders. Officials decided during a meeting between the ruling Democratic Party’s digital asset task force and the Financial Services Commission.

🚨 SOUTH KOREA SETS 20% OWNERSHIP CAP FOR CRYPTO EXCHANGES

South Korean authorities have agreed to cap how much stock a major shareholder can hold in crypto exchanges at 20%

This aims to stop too much control in the hands of a few and improve governance of big trading… pic.twitter.com/JZoXWs77JW

— Coin Bureau (@coinbureau) March 4, 2026

Officials included flexibility within the proposal. The Financial Services Commission may allow ownership stakes of up to 34% in specific cases. The regulator will define those cases through enforcement decrees. Policymakers linked the rule to governance concerns inside exchange operators.

The proposal outlines a gradual implementation plan. Major exchanges will receive a three-year grace period after lawmakers enact the legislation. Smaller exchanges will receive additional time to adjust ownership structures. Regulators granted smaller platforms another three years beyond the first transition window. Policymakers expect a gradual restructuring rather than sudden ownership changes.

The ownership cap proposal first appeared earlier this year. The Financial Services Commission introduced the idea in January. Officials framed the measure as a response to governance risks tied to concentrated ownership. Regulators said large controlling stakes may limit oversight inside exchange operators. Policymakers, therefore, began drafting measures to distribute corporate control more broadly.

Corporate Stakes in Crypto Exchanges Face Restructuring Pressure

The suggested ownership limit might compel some of the major companies to restructure their exchange holdings. One of the most prominent examples is Bithumb. Bithumb Holdings presently owns over 73% of the Bithumb exchange. This level of ownership is way beyond the recommended 20% limit. The company might also be forced to dilute its controlling interest over time should the proposal pass.

Another case is the Gopax exchange. Binance now owns over 67% of the platform. This position also surpasses the intended threshold. The proposal may result in structural changes if lawmakers approve it.

The industry representatives have expressed great disapproval with the proposal. The Digital Asset Exchange Alliance condemned the ownership limit shortly after regulators presented the plan. The alliance cautioned that the regulation would stifle the development of the digital asset industry. Industry groups also cautioned that enforced equity redefinitions would undermine businesses within an emerging market.

Digital Asset Basic Act Progresses Amid Regional Market Volatility

The proposed ownership cap will likely appear in South Korea’s Digital Asset Basic Act. Lawmakers designed the act as a comprehensive regulatory framework for digital assets. The legislation addresses several parts of the cryptocurrency sector. The framework includes rules for stablecoin issuance and digital asset trading operations. Policymakers are also discussing the possible introduction of crypto exchange-traded funds in South Korea. Officials initially targeted 2025 for the rollout of the Digital Asset Basic Act. The Financial Services Commission is now preparing a final version of the proposal for lawmakers.

In a related development, financial markets across Asia recorded sharp volatility today. South Korea’s Kospi and Kosdaq indexes both dropped more than 10% during morning trading in Seoul. The fall triggered a circuit breaker on Wednesday.

Asia markets: South Korea’s Kospi plunged 12%+ in its worst session, as the Iran conflict sparked a broad risk-off move. The Korea Exchange temporarily halted trading, and circuit breakers also hit the Kosdaq, which finished ~14% lower. Volatility controls are back in focus.

— BreakingEquity (@BreakingEquity) March 4, 2026

Regional markets also declined. Japan’s Nikkei and Topix indexes fell by close to 4%. Hong Kong’s Hang Seng index dropped about 3%. Market analysts linked the selloff to rising geopolitical tensions in the Middle East. South Korea imports about 94% of its oil. Roughly 75% of those imports originate from the Middle East.