Kim Sang-hoon opposes limits on stakes in virtual-asset exchanges: ‘Accountability unclear, risk of capital flight’

The People Power Party (PPP) has officially voiced opposition to the Financial Services Commission’s (FSC) plan to cap controlling shareholders’ ownership stakes in virtual-asset exchanges. The party argues that such equity restrictions could instead blur management accountability and weaken the competitiveness of Korea’s digital-asset industry.

Rep. Kim Sang-hoon, who chairs the PPP’s Special Committee on Stock and Digital Asset Value-Up, expressed concern in an interview with a local media outlet on the 29th over the push to limit ownership stakes in virtual-asset exchanges. He said the stake cap is more likely to amplify side effects than contribute to market stability.

“Equity restrictions on exchanges can make it unclear who bears management responsibility, and in the long run could lead to an offshore outflow of capital,” Kim said. “Digital-asset exchanges are private companies that grew up in a startup environment, and imposing artificial limits on ownership structures now runs counter to the trajectory of industrial development,” he added.

He also criticized the government’s approach, saying, “The government has shown a one-track, regulation-first stance, and if stake restrictions were necessary, an institutional framework should have been put in place in the market’s early stages.” He added, “There are aspects that are hard to accept in the process by which a regulation not included in the FSC’s original draft was added belatedly.”

The FSC has previously defined digital-asset exchanges as market infrastructure with the character of public infrastructure, and is reviewing including in the Framework Act on Digital Assets (second-stage legislation) a plan to limit a single controlling shareholder’s stake to around 15–20%. The aim is to prevent excessive concentration of control in a specific individual or shareholder.

With Kim’s opposition now public, if the share-cap provision is included in the Framework Act on Digital Assets being reviewed by the Democratic Party of Korea, a legislative clash between the ruling and opposition parties appears inevitable. While industry and political circles broadly agree on the need to strengthen oversight of exchanges, voices are growing that further discussion is needed on whether a stake-cap approach is appropriate.