South Korea Proposes Ownership Cap on Cryptocurrency Exchanges

The South Korean government is planning to introduce a regulation that would limit the ownership of major shareholders in domestic cryptocurrency exchanges to 20%. This move comes as part of an effort to increase competition and diversity in the market. According to reports, the proposal has been agreed upon by the government and ruling party.

Currently, a few large exchanges, including Upbit and Bithumb, dominate the market, with ownership structures exceeding the proposed threshold. Regulators believe that reducing concentrated ownership will promote transparency and accountability among exchange operators.

The proposed rule would also allow new companies to enter the market with up to 34% ownership through enforcement decrees under specific conditions. A transitional period of three years has been suggested for current operators to adjust their shareholder structures, while smaller platforms could obtain an extra three-year grace period before compliance deadlines.