South Korea is preparing a two-pronged regulatory push that could reshape the governance and supervision of its cryptocurrency exchange market. The proposals target both the concentration of exchange ownership and the enforcement gap around unregistered virtual asset service providers (VASPs).
Exchange ownership caps and transition measures. South Korean financial authorities are maintaining their policy direction to limit major shareholders' stakes in cryptocurrency exchanges as part of a broader digital asset law. According to a report by Newsis, regulators are now considering transition measures that would allow existing major shareholders to reduce their stakes legally without triggering sudden sell-offs or market disruption. Under options being reviewed, individual shareholders could hold between 15% and 20% of an exchange, while consortium structures might be permitted to hold more than 30% to reflect practical management control. The measures are intended to disperse ownership, reduce concentration of power, and enhance market integrity. Authorities are also trying to protect property rights while moving toward the new ownership structure.
FIU crackdown on unregistered firms. Separately, a bill introduced in the National Assembly on Aug. 20 would explicitly empower the Financial Intelligence Unit to investigate and penalize unregistered VASPs. The amendment to the Act on Reporting and Use of Specific Financial Information was put forward by 10 lawmakers, including Rep. Eom Tae-young of the ruling People Power Party, as reported by Digital Asset. Currently, the FIU can generally act only on reports from financial institutions or formal complaints. The bill would allow any individual to report suspected violations directly to the FIU chief, after which the agency could conduct investigations, request data, and refer cases to prosecutorial or police authorities. Since 2021, all VASPs in South Korea have been required to register with the FIU and comply with anti-money laundering rules, but unregistered platforms have continued to operate.
Market impact and outlook. If enacted, the measures could force unregistered exchanges to register or exit the Korean market, while legitimate platforms may benefit from clearer rules and reduced unfair competition. For existing major shareholders, the transition framework may offer a structured path to compliance. South Korea remains one of the world's most active crypto markets, and its regulatory approach is often watched as a potential precedent. The bills are still in early stages and must pass committee review and a full vote in the National Assembly. The FIU would also need adequate resources to handle an increased caseload.
