South Korean regulators bid to cap crypto exchange stakes at 20%

Regulatory Developments - South Korean regulators, specifically the Financial Services Commission (FSC), are proposing a cap on individual share ownership in domestic crypto exchanges, limiting it to between 15% and 20% to prevent conflicts of interest [1][4] - The FSC asserts that crypto exchanges have become a form of "public infrastructure," necessitating restrictive ownership regulations that would apply to both individuals and companies [4] Government and Industry Response - There is significant opposition from the government and industry figures regarding the FSC's proposed ownership cap, with the ruling Democratic Party not including such provisions in the Basic Digital Asset Act draft [4][5] - As crypto adoption increases in South Korea, tensions are rising among regulators, tech firms, and lawmakers, indicating a potential impasse in governance structures for the sector [2][3] Current Ownership Landscape - Most of South Korea's major crypto exchanges are currently controlled by single individuals or companies, typically their founders, and none comply with the FSC's proposed ownership rules [6] - Notable ownership examples include Song Chi-hyung, co-founder of Dunamu, who owns approximately 26% of the company, and Nexon, which holds over 60% of Korbit's shares, while Binance controls over 67% of GOPAX's shares [7]