South Korea Plans to Cap Crypto Exchange Shareholder Stakes at 20%

South Korean authorities have finalized a plan that would require majority shareholders of cryptocurrency exchanges to reduce their ownership stakes to a maximum of 20%, according to local media reports.

Key Details of the Proposed Restrictions

New market entrants would be granted an exception under the proposed subordinate legislation, allowing them to hold up to 34% of an exchange. This threshold references the country's Commercial Code, under which a 33.3% voting stake is sufficient to block resolutions at a general shareholders' meeting.

If enacted, existing exchanges would be given a three-year transition periodto restructure their ownership. The regulation primarily targets Upbit and Bithumb, which together control approximately 90% of South Korea's crypto trading market. Smaller platforms would receive an additional three-year grace period.

Largest crypto exchanges in South Korea. Source: CoinGecko

Current Ownership Structure

Current majority stakes across South Korea's leading exchanges far exceed the proposed 20% cap:

• Upbit chairman Song Chi-hyung holds approximately 25.52%;
• Bithumb Holdings controls roughly 73.56% of Bithumb;
• Mirae Asset Consulting would own approximately 92.06% of Korbit following a recent deal;
• Binance holds around 67.45% of GOPAX.

Nearly every major platform would need to undergo significant ownership restructuring to meet the new requirements.

Why This Matters

South Korea ranks among the world's largest cryptocurrency markets, and imposing ownership caps on exchange shareholders could set a precedent for other jurisdictions. Limiting majority stakes to 20% would be unprecedented in global crypto exchange regulation.

Local media have already flagged potential risks, warning that such restrictions could weaken competition, slow innovation, and create high barriers to market entry. Critics argue the approach runs counter to global regulatory practices.

Legislative Outlook

Despite regulatory backing, the bill faces a lengthy path to adoption. The proposal has not yet been formally introduced in the National Assembly — a lawmaker must first sponsor it, and no candidate has been identified so far.

Approval could face resistance: some parliamentarians, including members of the ruling party, have already expressed doubts about whether such strict limitations are necessary.

Broader Regulatory Tightening

The shareholder cap proposal is part of a wider regulatory push in South Korea. Earlier in 2026, the National Assembly strengthened licensing requirements for virtual asset service providers (VASPs). Regulators gained the authority to screen executives and majority shareholders for involvement in a broader range of offenses — from drug trafficking and tax evasion to antitrust violations and serious financial crimes.

In February, lawmaker Kim Seung-won announced amendments to capital market laws and the Virtual Asset User Protection Act. The proposed changes would mandate disclosure of individuals who provide investment advice or promote trading in financial products and cryptocurrencies.

Meanwhile, South Korea lifted its ban on corporate cryptocurrency investments in January 2026, illustrating a dual approach: expanding institutional access while simultaneously tightening control over market infrastructure.