Korea Weighs 20% Ownership Cap for Crypto Exchange Shareholders

South Korea’s financial regulator is moving to cap the stake that a major shareholder can hold in a <a href="https://xpertsstudio.com/crypto-etf-state-of-the-union-seis-etf-expansion/” title=”Crypto ETF State of the Union & SEI's ETF Expansion”>cryptocurrency exchange at 20%.

The Financial Services Commission plans to release a government draft of the Digital Asset Basic Act as early as early next month, according to the National Assembly and financial industry sources on the 26th. Yoo Dong-soo, chair of the National Assembly’s National Policy Committee, is widely expected to introduce the measure as a lawmaker-sponsored bill based on that draft and push for passage within the year. The Digital Asset Basic Act is an industry framework law covering the digital asset sector as a whole, including the scope and categories of virtual asset service providers as well as the issuance and circulation of stablecoins.

The provision drawing the most attention in the government draft is the ownership restriction on major shareholders of exchanges. The FSC has been reviewing a plan to limit a major shareholder’s stake to 20% in principle, regardless of an exchange’s size or market share, sources said. Discussions are under way to allow up to 34% for certain exceptions, such as new operators. Also under consideration is a three-year grace period for existing operators to unwind stakes above the cap. Regulators have concluded that the current governance structure, in which management control of exchanges is excessively concentrated in specific founders or major shareholders, needs to be overhauled.

More recently, officials have been weighing an alternative that would set a ceiling on a major shareholder’s voting rights rather than on the stake itself. Under that approach, a major shareholder holding more than 20% would be able to exercise voting rights of only up to 20% at a shareholders’ meeting. Raising the voting-rights ceiling to 34% for limited exceptions is also being discussed.

#DigitalAssetBasicAct#KoreaCrypto#FSC#CryptoExchange#Stablecoin#CryptoRegulation

Original reporting by Do Ye-ri for Seoul Economic Daily.

AI-translated from Korean. Quotes from foreignxact original wording

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