Lee Eog-won, chairman of the Korean Financial Services Commission, emphasized the need to limit the ownership of major shareholders in virtual asset exchanges. He said the measure was necessary to align governance standards with the exchange’s growing public role.
The proposed ownership restrictions come amid broader regulatory moves in South Korea’s cryptocurrency market. The government is preparing to expand anti-money laundering rules by making the Cryptocurrency Travel Rule applicable to transfers of less than $680.
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This change follows the Virtual Asset User Protection Act, which comes into effect in July 2025 and prohibits insider trading, market manipulation, and illegal trading of virtual assets. Exchanges will now be required to collect and share information about senders and recipients of small transfers.
The comments suggest regulators plan to press ahead with the proposal despite resistance from industry players and concerns from the ruling Democratic Party.
According to reports, the FSC is considering capping the controlling shareholder’s shareholding ratio at around 15-20%. This provision will be included in the interim digital assets basic law, which will be considered the second phase of the country’s virtual assets law.
Financial Services Commission Chairman Lee Eog-won on Wednesday formally emphasized the need to limit the ownership of major shareholders in virtual asset exchanges. https://t.co/zpV4sxM29I
— Korea Times (@koreatimescokr) January 28, 2026
South Korea targets ownership concentration risk
Lee said existing regulations, such as the Specified Financial Transaction Information Reporting and Use Act and the Virtual Asset User Protection Act, primarily focus on anti-money laundering and investor protection. “The proposed transition to a licensed system would effectively give exchanges permanent operational status,” he said, adding that governance rules would be needed that reflect the broader role of exchanges.
He pointed out that if approved, the exchange would no longer be treated as just a private company, but would have the same characteristics as public infrastructure. “Excessive concentration of ownership increases the risk of conflicts of interest and may undermine the integrity of the market,” Lee said. He also pointed out that stock exchanges and alternative trading systems already face ownership restrictions.
The proposal is part of efforts to integrate crypto exchanges into the mainstream financial system and improve accountability, transparency, and public oversight.
Upbit, Coinone stakes may have a cap
The joint council of domestic exchanges, including Upbit, Bithumb and Coinone, opposes the cap, warning that it could hinder the sector’s development. In Upbit, chairman Song Chi-hyun and related parties hold more than 28% of the shares, while CoinOne founder Cha Myung-hoon controls about 53%.
Lee said talks with the ruling party are continuing. “We will continue our discussions with Parliament and relevant ministries to ensure the bill moves forward without unnecessary delays,” he said.
