"It will shrink the market"…Ruling and opposition parties voice concerns at the National Assembly’s Political Affairs Committee over 'caps on major shareholders’ stakes in exchanges'

Both the ruling and opposition parties on the 5th voiced concerns in unison at the National Assembly’s Political Affairs Committee over the government’s proposed policy to cap major shareholders’ stakes in “virtual asset exchanges.”

Rep. Kim Sang-hoon, chair of the People Power Party’s Stock and Digital Asset Value-up Special Committee, said at the committee’s plenary meeting that day, “It would be one thing if regulations existed before the virtual asset market was formed, but lowering stake ratios after the fact could make accountability extremely ambiguous (if an incident occurs).”

Rep. Lee Kang-il of the Democratic Party of Korea also said that day, “The virtual asset exchange market is close to a monopolistic market, and latecomers’ market share is within 3%,” adding, “To break the current monopolistic structure, latecomers need bold investment, but if you impose a stake-ratio cap on them as well, who will drive innovation?” He suggested that “there is a need to differentiate stake ratios by dividing virtual asset exchanges into tiers (depending on size),” and urged that decisions be made “in a way that effectively helps reshape the market.”

Earlier, the Financial Services Commission decided to include in the Digital Asset Basic Act a plan to limit major shareholders’ stake ratios in exchanges to 15~20%. It also plans to introduce a major shareholder qualification review equivalent to that applied to alternative trading systems (ATS) in the capital market.

The industry is pushing back, arguing that the policy effectively induces forced divestment of stakes and constitutes excessive infringement of property rights. Earlier, the Democratic Party’s Digital Asset TF advisory panel issued an opinion the previous day (the 4th), stating that “it is difficult to justify constitutional issues such as restrictions on property rights based solely on concerns over market monopoly/oligopoly, concentration of profits, and conflicts of interest.”