South Korea's FSC responds to controversy over shareholding limits on virtual asset exchanges: strengthening regulatory responsibility, not targeting specific companies

PANews reported on October 10, citing Yonhap News, that Lee Bok-hyun, Chairman of South Korea's Financial Services Commission, said the provision on shareholding limits for major shareholders of virtual asset exchanges in the Digital Asset Basic Act being pursued was not prompted by instructions from any specific individual, but rather out of consideration that exchanges need to bear greater public responsibility after institutionalization.

During a state audit by the Financial Services Commission at the National Assembly's Political Affairs Committee, Lee Bok-hyun said that South Korea's virtual asset exchanges currently operate under a reporting system renewed every three years, but after the Digital Asset Basic Act takes effect in the future, exchanges will shift to an institutionalized operating model requiring a license. He said exchanges have the attributes of infrastructure, and therefore need publicness and accountability commensurate with their status.

Earlier, South Korean lawmakers questioned whether the shareholding limit provision — which was not included in the FSC's original proposal — was influenced by external parties, and pointed out that if enforced, major shareholders and potential acquirers of South Korean exchanges might need to sell shares worth trillions of won.

In response, Lee Bok-hyun said the government is currently drafting the relevant bill, and the specific shareholding limit details can be further coordinated during the National Assembly's review process, adding that the design will fully reflect the opinions of all parties. He also said the government's version of the Digital Asset Basic Act is undergoing final coordination and will be submitted as soon as possible, but did not disclose a specific timeline.