FSC Chair Defends South Korea’s Crypto Exchange Ownership Caps

South Korea’s top financial regulator signaled a deeper pivot on crypto-exchange governance, arguing that licensed platforms should be treated as core public infrastructure rather than purely private firms. The remarks come amid ongoing work on the Digital Asset Basic Act, a legislative package that aims to tighten oversight and create a formal authorization regime for exchanges. FSC chair Lee Eog-weon outlined a plan to cap ownership by major shareholders and to align governance standards with those used in traditional securities markets. Lawmakers are also weighing a separate stablecoin framework that would set minimum capital requirements for issuers, with a target of 5 billion won ($3.7 million). The package signals Seoul’s intent to escalate governance reforms in a rapidly evolving market.

Key takeaways

• Major crypto exchanges in Korea could face ownership caps modeled on securities, aiming to prevent control by a few families or entities.
• The plan would move exchanges from a renewal-based notification system to an authorization regime with longer-duration licenses.
• The FSC frames exchanges as infrastructure with public responsibilities, aligning governance with traditional market venues and ATS frameworks.
• Stakeholders cited in reporting include Dunamu and Coinone, where sizable family or founder stakes have drawn scrutiny and may trigger restructurings.
• The proposed stablecoin regime would require at least 5 billion won in capital for issuers, a contentious provision amid broader regulatory negotiations.
• Timeline for enactment remains fluid, with committee reviews and a National Assembly vote still pending ahead of the Lunar New Year.

Market context: The debate in Seoul mirrors a broader trend in crypto regulation as jurisdictions seek clearer governance standards for exchanges, stablecoin issuers, and other on-chain financial actors. In Asia, regulators are increasingly tying operator licenses to infrastructure-like responsibilities, while policymakers weigh how to balance innovation with investor protection and financial stability.

Why it matters

For users and investors, the potential ownership caps could reshape who controls Korea’s largest exchanges and how they participate in governance. Concentrated ownership can affect liquidity, strategic decisions, and access to long-term capital. If enacted, the rules could force incumbents to renegotiate stakes or bring in new strategic partners to comply with a stricter regime, potentially altering trading dynamics and product development timelines.

For builders and practitioners, the shift toward an authorization framework brings more predictability to licensing, but also raises compliance costs and due diligence expectations. Governance reforms tied to public-infrastructure status may push platforms to adopt more rigorous suitability assessments and disclosure practices, aligning with how traditional securities venues operate.

What to watch next

• Committee reviews and a National Assembly vote on the Digital Asset Basic Act, with a timeline likely before the Lunar New Year (Feb 17).
• Decisions on the ownership cap thresholds (15–20%) and any required restructuring by top exchanges such as Dunamu and Coinone.
• Finalization of the stablecoin capital requirement (5 billion won) and the central bank’s role within the regulatory framework.
• Public statements from exchange operators and investors on the feasibility and commercial impact of the proposed reforms.

Sources & verification

• Yonhap News Agency coverage of the ownership cap move and its progression toward an public-infrastructure framing for exchanges.
• Maeil Business Newspaper reporting the proposed 5 billion won minimum capital requirement for stablecoin issuers.
• Korea Times coverage of FSC Chair Lee Eog-weon’s comments and the push for governance reforms in the exchange sector.
• Policy coordination document submitted to the National Assembly outlining preparations for the Digital Asset Basic Act.

Regulatory push redefines governance for Korea’s crypto exchanges

South Korea is intensifying its regulatory posture around the crypto markets, driven by a conviction that exchanges operate as indispensable infrastructure within the digital-asset ecosystem. In statements reported as part of ongoing preparatory work for the Digital Asset Basic Act, the Financial Services Commission (FSC) chair emphasized a shift in how exchanges should be treated — from private firms with occasional regulatory oversight to entities carrying public-infrastructure responsibilities. The core of the plan is to introduce ownership caps on major shareholders, a move designed to dilute the lopsided control that could enable market manipulation or undermine confidence in the trading environment.

The chairman’s remarks align with a broader push to move exchanges from a three-year renewal model toward an authorization regime that grants more durable operating status. In this framework, governance rules — including robust suitability reviews for investors and tighter disclosure requirements — would parallel the standards applied to securities markets and alternative trading systems (ATS). The aim is to cultivate a more resilient, transparent, and accountable trading landscape that can support a formal licensing regime as the Digital Asset Basic Act takes shape.

The policy direction rests on a recognition that concentrated ownership can pose risks to market integrity. Reports describe the ownership cap as a lever to ensure more distributed control and to deter strategic moves that could stifle competition or distort price discovery. The policy narrative also notes that exchanges serve as core market infrastructure, a characterization that justifies governance rules that resemble those imposed on traditional financial venues.

As the discussions unfold, questions remain about the practical impact on the ownership structure of Korea’s largest platforms. Public statements cited that Dunamu Chair Song Chi-hyung and related parties hold more than 28% of the company’s shares, while Coinone founder Cha Myung-hoon maintains a controlling stake of 53% in the exchange. If the caps are enacted, such concentrations could trigger mandatory restructurings or force the recruitment of new, independent investors to meet regulatory thresholds. While these details paint a potentially disruptive picture, supporters argue that a more distributed ownership base would bolster market confidence and long-term resilience.

The regulatory equation is further complicated by the stablecoin provisions, which set a capital floor for issuers at 5 billion won. Lawmakers have signaled that the negotiating process is ongoing, with the Lunar New Year deadline on February 17 serving as a milestone rather than a hard enforcement date. Earlier iterations of the bill faced delays as policymakers debated how to oversee stablecoin issuers without stifling innovation. In the current round of discussions, other elements of the Digital Asset Basic Act appear to be advancing, but the ownership caps and the central bank’s role remain among the most contentious topics. If approved, the framework would mark a significant shift in how Korea regulates the intersection of finance and technology, with implications for both domestic players and the broader regional ecosystem.

In parallel, observers note that the transition to an authorization regime would bring Korea’s exchange governance more in line with international norms, potentially easing cross-border collaboration and enhancing investor protection. Critics, however, warn that abrupt shifts in ownership structures could disrupt strategic collaborations, financing plans, and product roadmaps at a moment when the market is already undergoing rapid experimentation with tokens, lending protocols, and new trading formats. The policy debate continues to unfold against a backdrop of evolving regulatory expectations across Asia, where several jurisdictions are recalibrating their stance on licensing, stablecoins, and capital requirements for crypto-asset issuers.

The path forward will likely hinge on the National Assembly’s scrutiny, committee deliberations, and the alignment of the Digital Asset Basic Act with broader financial policy goals, including the central bank’s perspective on macro-stability and monetary policy transmission. As the discussions advance, industry participants will be watching for concrete timelines, the specifics of the ownership cap, and the exact criteria that would trigger an authorization status for exchanges. The outcome could shape not only the competitive dynamics within Korea but also the manner in which regional operators structure partnerships, governance, and capital planning in a rapidly changing regulatory environment.