South Korea’s Digital Asset Exchange Alliance (DAXA) has pushed back against a government proposal that would cap ownership stakes in local crypto exchanges. Under the plan now under discussion, individual shareholders would be limited to 15% to 20% ownership in a trading platform. The measure is expected to be included in the Digital Asset Basic Act, though the bill remains under legislative review and could be delayed into 2026.
DAXA says rigid limits could hurt long-term investment
The alliance argues that a fixed ownership ceiling could weaken the sector’s growth path, discourage long-term capital, and reduce the global competitiveness of South Korean exchanges. Its position centers on a simple point: imposing hard equity thresholds on private companies that already have established governance structures may disrupt operational stability without producing meaningful regulatory gains.
DAXA represents five of the country’s largest crypto exchanges: Upbit, Bithumb, Korbit, Coinone, and Gopax. The group says the issue is not only about shareholding structure itself, but also about broad-brush regulation. According to the alliance, many member platforms already operate under strict compliance systems, internal controls, and audit requirements. Applying the same ownership cap across the board, regardless of governance maturity, could force unnecessary restructuring.
Regulators are focused on concentrated control risks
The proposal comes from the Financial Services Commission (FSC), which has identified governance risks and concentrated control by major shareholders as its central concern. That has created a clear split in framing. Regulators are looking at structural risk, while exchanges argue that dispersed ownership does not automatically produce better governance.
DAXA also warned that reducing concentrated ownership would not necessarily improve user protection. In its view, the opposite could happen if accountability becomes less clear. Responsibilities tied to custody, risk management, and operational decision-making could become blurred, which would affect how exchanges assign and enforce internal control duties.
Ownership debate comes with wider regulatory tightening
The pressure from regulators extends beyond exchange ownership. The report notes that in January, the FSC was also considering a 5% cap on corporate exposure to digital assets through equity holdings and investment allocations. Regulators present such measures as consumer protection, while industry participants see them as another sign of tighter oversight that could slow innovation.
At the same time, South Korea is still working through broader digital asset reforms, including a framework for stablecoins and possible digital asset products under the Digital Asset Basic Act. Timelines for ETFs or a national stablecoin remain unconfirmed. The dispute over ownership caps shows the same policy tension that has defined South Korea’s crypto debate for years: how to increase oversight and protect users without squeezing an industry that remains central to financial innovation.