Parliamentary Research Service Flags Potential Clash Between Crypto Exchange Ownership Caps, Holding Company Rules

South Korea’s National Assembly Research Service said any move to cap major shareholders’ stakes in virtual asset exchanges should be reviewed alongside existing holding company ownership rules under the Fair Trade Act.

Maeil Business Newspaper reported on September 15 that the research service, in a report submitted to the office of Democratic Party lawmaker Park Min-kyu, said a holding company could struggle to satisfy two different ownership thresholds at the same time if it were to bring a crypto exchange under a subsidiary structure.

Under the current Fair Trade Act, a holding company must own at least 50% of an unlisted subsidiary. The minimum stake is 30% for a listed subsidiary and 20% for a subsidiary under a venture holding company.

By contrast, discussions over the proposed Digital Asset Basic Act include a plan to limit a major shareholder’s stake in a crypto exchange to 20% or less in principle, while allowing as much as 34% if certain conditions are met.

The research service said the two regulatory frameworks are structured in ways that could formally conflict. Still, it added that it would be hard to conclude they generally clash in every case because their policy goals and targets differ.

The Fair Trade Commission has expressed a similar view. The agency said ownership rules under the Fair Trade Act are meant to ensure accountable governance under a holding company structure, while exchange ownership caps are intended to promote market fairness through dispersed ownership.

The report also cited the proposed business combination between Naver Financial and Dunamu. The research service said the Fair Trade Act’s holding company rules do not immediately apply because Naver Financial is not currently classified as a holding company, but the issue could become real if its governance structure changes and it later meets the requirements for holding company status.

The research service said lawmakers should calibrate future regulation by weighing not only user protection and market fairness, but also industry competitiveness, investment incentives, corporate governance and the relationship with existing rules during the legislative process.