Financial Services Commission holds meeting with five major crypto exchanges, reaffirms plan to cap controlling shareholders’ stakes

South Korea’s financial authorities met with executives of major domestic cryptocurrency exchanges and again underscored their plan to limit controlling shareholders’ ownership stakes. The meeting is seen as a step to reconfirm the regulatory direction ahead of the government’s draft of the Digital Assets Basic Act (second phase of legislation).

On the 23rd, the Financial Services Commission (FSC) held a closed-door meeting at the Government Complex Seoul, chaired by Vice Chairman Kwon Dae-young, with the heads of five exchanges—Upbit, Bithumb, Coinone, Korbit and GOPAX—as well as officials from the Digital Asset eXchange Alliance (DAXA). The meeting lasted about 80 minutes, and a Bank of Korea official was also said to have attended.

As it outlined key elements of the government’s draft Digital Assets Basic Act, the FSC reiterated its intention to include a provision capping the stake of an exchange’s largest shareholder at 15–20%. With exchanges set to move to a licensing regime that strengthens their public role, the regulator argues that equity restrictions are needed to disperse ownership and prevent conflicts of interest. The industry is said to have conveyed concerns over the plan.

The FSC has previously maintained that, because a licensing regime would effectively confer a permanent status, internal controls and major-shareholder fit-and-proper requirements must be applied strictly. In recent parliamentary questioning related to Bithumb’s erroneous payment incident, the commission also said internal controls and oversight of major shareholders would be core licensing criteria. Attention is now on how the equity-cap proposal will be decided during the legislative process.