PPP Slams Proposed Cap on Major Shareholders’ Stakes in Crypto Exchanges… “Don’t Shackle the Industry With Regulation”

The People Power Party (PPP) has publicly raised objections to the Financial Services Commission’s (FSC) push to impose a “cap on major shareholders’ equity stakes in digital asset exchanges.” The concern is that excessive regulatory constraints on a digital-asset market that has grown under private-sector leadership could undermine the industry’s competitiveness.

Kim Sang-hoon, a PPP lawmaker who chairs the party’s Special Committee on Stock and Digital Asset Value-Up, made the remarks on the 14th at a special committee-hosted “policy roundtable with the digital asset industry,” held at Dreamplus Gangnam in Seocho-gu, Seoul. “Even though the digital asset market has grown under private-sector leadership, the government has consistently shown a hesitant stance toward market activation, citing reasons such as anti-money laundering (AML),” he said.

In opening comments, Kim noted that “as policy signals—such as the 2018 controversy over shutting down exchanges and remarks that ‘virtual assets have no intrinsic value’—were repeated, the achievements accumulated by the private sector were dismissed,” adding, “as a result, the market contracted sharply.” He continued, “Over the same period, major countries overseas have regarded digital assets as next-generation financial infrastructure and have been putting institutional foundations in place,” adding that “as a result, the status of digital assets in the global financial order has changed significantly.”

The biggest flashpoint at the roundtable was the proposed “cap on major shareholders’ stakes in digital asset exchanges,” which is expected to be included in the FSC-led government draft of the Digital Asset Framework Act. The FSC has maintained that a single major shareholder’s ownership stake in a digital asset exchange should be limited to 15–20%, on par with the Alternative Trading System (ATS) level under the Capital Markets Act. The logic is that because digital asset exchanges effectively serve as financial-market infrastructure with a public-good character, the structure in which operating profits—such as fee income—are excessively concentrated in a specific individual should be improved.

However, the plan has sparked strong pushback from the industry. The Digital Asset Exchange Alliance (DAXA)—a consultative body involving Dunamu, Bithumb, Coinone, Korbit, and Streami (GOPAX)—issued a statement on the 13th, saying that “attempts to artificially change private companies’ ownership structures could lead to a broad-based contraction of the digital asset industry.”

If the regulation is introduced through a legal revision, most major domestic exchanges would find it difficult to avoid restructuring their equity ownership. It is also expected to have a direct impact on large conglomerates pursuing exchange mergers and acquisitions (M&A). Naver holds 100% of Dunamu shares through its financial affiliate Naver Financial, so if the major-shareholder cap is applied, a redesign of the structure would be unavoidable. Mirae Asset, which is pursuing the acquisition of Korbit, is also likely to face the same issue.

The special committee’s position is that the market impact of such regulation should be examined more closely. Kim said, “We need to seriously revisit whether constraining the achievements built by the private sector through administrative regulation is really a direction that enhances industrial competitiveness and investment incentives,” adding that “it is also necessary to reconsider whether forced ownership dispersion is the solution.”

Concerns were also voiced during the closed-door discussion that followed. Choi Bo-yoon, a PPP lawmaker and member of the special committee, said in a back-briefing held right after the closed session, “The industry raised concerns that the cap on major shareholders’ stakes in exchanges amounts to reverse discrimination against the domestic market,” adding that “there was also discussion over whether it is appropriate to apply the existing framework used to regulate the stock market to the digital asset market as-is.” She added, “We will listen sufficiently to the industry’s views and discuss the matter carefully at the National Assembly level.”

There was also discussion of a plan to allow stablecoin issuance by consortia in which banks hold a majority stake (50%+1) or more. Earlier, the FSC, in coordination with the Bank of Korea, had moved toward including that content in the government draft. However, the proposal has been criticized as a regulation that runs counter to global standards and hinders private innovation, and it is facing difficulties in coordination with the National Assembly.

On this, Choi said, “The global stablecoin market is growing under the leadership of non-bank private platforms such as Circle and Tether,” adding, “industry opinions were raised that private-sector-led issuance should also take place in Korea with reference to this.” She continued, “We will keep considering, after hearing diverse views, what the better direction is.”

Hwang Doo-hyun, BloombergBit reporter cow5361@bloomingbit.io