South Korea's top financial regulator, the Financial Services Commission (FSC), is advancing a dual-pronged regulatory framework that will significantly reshape the domestic cryptocurrency landscape. The cornerstone of this effort is the planned Digital Asset Basic Act, which introduces stringent governance rules for exchanges and capital requirements for stablecoin issuers.
FSC Chairman Lee Eog-weon announced plans to cap the ownership stakes of major shareholders in domestic crypto exchanges at 15% to 20%. This measure aims to prevent excessive concentration of control as exchanges transition from a temporary notification system to a permanent authorization system, effectively granting them a status akin to public financial infrastructure. "Excessive concentration of ownership could heighten conflicts of interest and weaken market integrity," Lee stated, drawing parallels to ownership limits already applied to securities exchanges.
The proposal has faced sharp criticism from the industry. A joint council representing major exchanges like Upbit, Bithumb, and Coinone argues the caps could stifle sector development. The rule would force significant divestments; for instance, Dunamu (Upbit's operator) Chair Song Chi-hyung controls over 28%, and Coinone founder Cha Myung-hoon holds roughly 53%.
Simultaneously, the ruling Democratic Party has finalized the Digital Asset Basic Law, which mandates that stablecoin issuers must hold a minimum capital of 5 billion won (approximately $3.5 million). This threshold matches requirements for electronic money firms and is designed to ensure issuer reliability and protect users from collapse. The bill also establishes a Virtual Asset Committee, led by the FSC chair and including the Bank of Korea's deputy governor, to coordinate rapid responses to market crises like hacks or system failures.
Despite the push for structure, concerns remain. Bank of Korea Governor Lee Chang-yong warned that stablecoins, especially those pegged to the U.S. dollar, could undermine capital controls by facilitating rapid cross-border money flows. The law maintains a two-track system of registration and direct authorization for higher-risk sectors to balance innovation with consumer protection.
