The Financial Services Commission (FSC) of South Korea proposed a recommendation during the review of the "Basic Law on Digital Assets": to limit the shareholding ratio of major shareholders of cryptocurrency exchanges to between 15% and 20%, aiming to prevent excessive ownership concentration and reduce governance risks.

Once the news broke, the Korea Digital Asset Exchange Association (DAXA) quickly issued a statement opposing the proposal, with a very clear stance.

DAXA's core view is straightforward. Exchanges are not just companies operating in the domestic market; digital assets can flow freely across borders. If domestic platforms face financing difficulties and underinvestment due to shareholding restrictions, their competitiveness will almost certainly decline.
By then, users and liquidity will flow to overseas platforms, which could weaken the domestic market.

A more critical point is responsibility. Exchanges bear the ultimate risks of user asset custody and system security. Forcibly dispersing shareholding through administrative means may seem to weaken control, but in reality, it could blur the question of who is ultimately responsible. In DAXA's view, this approach may not necessarily be more conducive to user protection.

This controversy reflects not just a simple regulatory conflict but a common tug-of-war in emerging industries: how to balance risk prevention and maintaining competitiveness.

The "Basic Law on Digital Assets" is expected to advance legislation in the first quarter of this year. Its final direction may become an important tone-setting for South Korea's digital asset regulation approach.

#韩国加密监管 #Digital Asset Basic Law #Exchange Governance