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The National Assembly Research Service (NARS) has analyzed that the major shareholder stake cap on virtual asset exchanges under discussion in the Digital Asset Framework Act—20% in principle, with exceptions up to 34%—could conflict with the Monopoly Regulation and Fair Trade Act’s requirement that holding companies own at least 50% of unlisted subsidiaries. However, NARS also noted that because the two regulations serve different purposes, they cannot be viewed as a blanket conflict in all cases. The Korea Fair Trade Commission explained that companies could adjust through listing or by using the venture holding company structure. The Office for Government Policy Coordination mentioned the possibility of classifying the rule as a major regulation. The corporate combination of Naver Financial and Dunamu was also cited as a case where the issue could become a real point of contention if a holding company conversion occurs in the future.
Key Elements
The National Assembly Research Service (NARS) has released an analysis indicating that if regulations capping the stake of major shareholders in virtual asset exchanges are introduced, they could conflict with existing holding company ownership requirements under South Korea’s Monopoly Regulation and Fair Trade Act. The core issue: when a holding company seeks to bring an exchange under its umbrella as a subsidiary, it may be structurally impossible to satisfy both sets of rules simultaneously.
NARS delivered this assessment in a report submitted to the office of Rep. Park Min-kyu of the Democratic Party of Korea. The Digital Asset Framework Act currently under discussion would cap a major shareholder’s stake in a virtual asset exchange at 20% in principle, with a maximum of 34% permitted if certain conditions are met.
NARS nonetheless concluded that while the two regulations are formally at odds, they cannot be viewed as a general conflict in every instance, given that their regulatory purposes and targets differ. The Korea Fair Trade Commission (KFTC) offered a similar interpretation.
The KFTC explained that the ownership rules under the Monopoly Regulation and Fair Trade Act are designed to ensure the alignment of ownership and accountability within a holding company structure, whereas the exchange stake cap aims to secure market fairness through dispersed ownership. Since the policy objectives differ, the commission takes the position that this should not be treated as a straightforward legal conflict.
The KFTC also outlined ways companies could reconcile the two regimes on their own. Options include: listing the exchange so that the 30% floor and 34% ceiling can be satisfied simultaneously within a narrow band; using the venture holding company framework to lower the floor to 20%; or abandoning the holding company structure altogether and reorganizing corporate governance.
The Office for Government Policy Coordination assessed that the stake cap regulation clearly restricts market entry and could cause inconsistencies and interference with existing rules, making it highly likely to be classified as a “major regulation” under the Framework Act on Administrative Regulations.
The corporate combination of Naver Financial and Dunamu was also examined as a key case in the report. NARS noted that because Naver Financial does not currently qualify as a holding company, the holding company rules under the Monopoly Regulation and Fair Trade Act do not yet apply directly. However, if the corporate group’s structure changes in the future and it meets the holding company criteria, the relationship with the exchange stake cap could emerge as a real point of contention.
NARS also presented views that the major shareholder stake cap could act as a barrier to market entry by making it difficult for new entrants to secure control, and that as gaining control of exchanges becomes harder, it could also affect corporate combinations and strategic investment approaches. In particular, if acquisitions of exchanges by large conglomerates or platform companies are constrained, dispersed ownership or joint control structures are likely to expand.
NARS recommended that the future legislative process should design the level of regulation by considering not only user protection and market fairness, but also industrial competitiveness, investment incentives, governance structures, and the relationship with existing regulations.
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Source: finance.biggo.com