Backlash grows over ‘exchange shareholding cap’… PPP to raise objections at National Assembly’s Political Affairs Committee

The People Power Party (PPP) is reportedly planning to press opposing questions at the full meeting of the National Assembly’s Political Affairs Committee on the 5th over limits on major shareholders’ stakes in virtual-asset exchanges.

According to the industry on the 4th, the PPP is preparing to challenge the proposed cap on controlling shareholders’ ownership in virtual-asset exchanges at the committee’s full meeting on the 5th, citing potential constitutional issues, among other concerns.

The Financial Services Commission (FSC) holds that major shareholders’ stakes in virtual-asset exchanges should be capped at 15–20%. The Democratic Party’s Policy Committee is also reportedly pushing to include such provisions in its ruling-party draft of the Basic Act on Digital Assets. If the regulation takes effect, all five major domestic virtual-asset exchanges—including Upbit, Bithumb and Coinone—would have to sell part of their major shareholders’ stakes.

The PPP, however, says it cannot accept the plan to cap major shareholders’ stakes at exchanges. Kim Sang-hoon, chair of the PPP’s Special Committee on Equity and Digital-Asset Value-Up, recently said at a forum that “we believe forced ownership dispersion could blur accountability and bring various side effects, including capital outflows overseas.”

The advisory committee to the Democratic Party’s Digital Assets Task Force (TF) also pushed back on the cap on exchanges’ major shareholders’ ownership ratios. In a written opinion submitted to the TF on the day, the advisory committee said, “Unless they are converted into public enterprises, the claim that reducing major shareholders’ stakes directly leads to stronger publicness is a logical leap,” adding that “separate in-depth discussions are needed on whether an ownership cap is an appropriate and effective means to achieve that goal.”