South Korean crypto exchanges oppose the equity cap proposal, warning of industry development risks

The Korea Digital Asset Exchange Alliance (DAXA) publicly opposed the government’s proposed policy to restrict the shareholding ratio of major shareholders in exchanges on Tuesday, stating that such a move could severely hinder the development of South Korea’s digital asset industry. In a statement released to The Block, DAXA pointed out that limiting the equity cap to 15% to 20% could not only affect the existing company’s ownership structure but also undermine user asset custody responsibilities and market stability.

Representatives of DAXA, including South Korea’s five major crypto exchanges, emphasized that digital assets have cross-border circulation characteristics. If domestic investments are restricted, it could lead to a decline in the global competitiveness of exchanges and prompt users to migrate to overseas platforms. Additionally, DAXA warned that dispersed ownership might weaken major shareholders’ ultimate responsibility for user assets, thereby harming the rights of investors and ordinary users.

The proposed equity restrictions by the Korea Financial Services Commission (FSC) are among several measures considered for inclusion in the draft of the “Digital Asset Basic Act.” The Digital Asset Basic Act is expected to be officially released in the first quarter of 2026, aiming to regulate stablecoin projects and South Korea’s first spot cryptocurrency ETFs, and to establish a comprehensive digital asset regulatory framework. DAXA stated that excessive intervention could create uncertainty, stifle entrepreneurial spirit and investment in startups, and hinder the development of the digital asset industry.

This equity cap proposal comes at a time when South Korean crypto exchanges are undergoing significant ownership restructuring. In November last year, South Korea’s leading local exchange announced plans to merge with Naver Financial, a subsidiary of IT giant Naver. The Mirae Asset Group, a South Korean financial services conglomerate, is also in talks to acquire Korbit. DAXA called on regulators to prioritize supporting the development of the digital asset industry and to refer to global standards to avoid damaging property rights and market economy principles.

Analysts pointed out that if the equity cap is ultimately approved, it could impact the operational structure of South Korea’s major exchanges and investor confidence, potentially prompting some investors to shift funds to overseas platforms. DAXA’s statement indicates that South Korea’s digital asset industry is actively providing feedback for policy formulation, seeking a balance between regulation and market development.