Ruling party, government split over timing of 15% cap on major shareholders in KRW Market [Crypto Briefing]

According to The Financial News, financial authorities are reviewing a dispersed ownership standard that would cap the stake of major shareholders in won-based virtual asset exchanges (KRW Market) at 15–20% under the second-stage legislation of the General Act on Digital Assets. However, a clear rift is emerging between the government and ruling party over this plan. The Democratic Party of Korea (DPK) Digital Asset Task Force (Digital Asset Task Force) agrees with the idea of limiting major shareholders' stakes in the KRW Market, but has stated that it will leave the measure out of the second-stage bill and instead address it in follow-up legislation. Given the political calendar in the first half of the year and legislative timetables in major countries such as the United States, the party argues that disagreements over the ownership cap should not be allowed to delay the entire second-stage legislative package.
On the 21st, according to the National Assembly of the Republic of Korea and the virtual asset industry, the DPK Digital Asset Task Force decided at a closed-door meeting the previous day to postpone a final decision on its position regarding a cap on exchange major shareholders' stakes. A Task Force official said, "We broadly agree with the Financial Services Commission (FSC)'s concerns that led it to push for dispersed ownership standards, including a reform of exchange governance," but added, "Taking the political schedule into account, we will consider handling this as a separate policy, such as through third-stage legislation."
Another Task Force official noted, "We need a multifaceted discussion on how to break up the monopolistic structure of large KRW Market operators." The official added, "Because the KRW Market has a public character similar to the Korea Exchange (KRX), there is significant concern about a structure in which specific individuals and related parties hold concentrated stakes, without ensuring transparent management."
Previously, the FSC submitted to the National Policy Committee and other relevant standing committees a plan to overhaul the governance of virtual asset exchanges. In it, the commission pointed out that institutional safeguards are lacking, including eligibility requirements for major shareholders in the KRW Market, the appointment of compliance officers, and the establishment of audit committees. Both the government and the ruling party agree on the need to disperse the excessive control of KRW Market major shareholders to enhance transparency, but they diverge over the timing and strategy for legislation.
At present, the FSC plans to finalize the government proposal through consultations between the government and ruling party, then support legislative deliberations in the National Assembly of the Republic of Korea after discussions at the Virtual Asset Committee. However, the DPK Digital Asset Task Force has concluded that, given its schedule to report its final proposal to the party's policy committee by the end of this month and to submit a party-sponsored bill early next month, including a highly contentious ownership cap could delay the entire legislative process.
The People Power Party has also listened to industry concerns about introducing an upper limit on exchange shareholdings through meetings with market participants. Even so, within and around the National Policy Committee, many point out that there is still no clear alternative to dismantle the monopolistic structure of large KRW Market operators. In response, industry players are proposing that, instead of a direct regulation such as an ownership cap, policymakers should strengthen the eligibility screening of major shareholders, expand the business scope by allowing business-to-business (B2B) virtual asset products and services for corporations, and lower barriers to market entry to encourage natural competition.
An official from the virtual asset industry said, "The issue of capping major shareholders' stakes in the KRW Market is likely to become a key point that will determine the overall direction of the General Act on Digital Assets." The official continued, "We are watching closely to see whether the financial authorities will stick to the 15% rule, or whether a compromise will be reached through political mediation at the level of strengthening major shareholder eligibility requirements."
elikim@fnnews.com Kim Mi-hee Reporter