South Korea’s regulatory framework for major shareholders of virtual asset exchanges is shifting its focus from limiting equity ownership to restricting voting rights. As the Financial Services Commission prepares to unveil its government proposal for the Digital Asset Framework Act as early as next month, a voting rights ceiling has emerged as the leading compromise to replace the 20% equity cap that has faced fierce industry opposition.
According to sources in the National Assembly and the virtual asset industry on the 26th, Political Affairs Committee Chairman Yoo Dong-soo plans to introduce legislation reflecting the government’s proposal as soon as it is submitted by the Financial Services Commission. The bill will be referred to a subcommittee for consolidated review alongside previously proposed digital asset legislation, with the goal of passage within the year. The Digital Asset Framework Act is an industry-wide law governing the scope and types of virtual asset service providers, as well as the issuance and distribution framework for stablecoins.
The core point of contention has been the equity cap on exchange major shareholders. The Financial Services Commission has maintained that a small number of founders and major shareholders exercise outsized control over exchanges—critical infrastructure for asset distribution—and that governance improvements are necessary. The commission has been reviewing a plan to cap major shareholder equity at 20% regardless of exchange size or market share. Exceptions for new entrants would allow up to 34%, with existing operators granted a three-year grace period to divest excess holdings.
However, the industry pushed back strongly, arguing the measure constitutes a violation of property rights. Even within the Democratic Party’s digital asset task force, consensus proved elusive, leaving discussions at an impasse. Recently, a compromise emerged: rather than directly capping equity holdings, the proposal would impose limits on voting rights. Shareholders could retain their stakes but exercise voting rights only up to 20%, with the ceiling raised to 34% in cases where exceptions are granted.
A National Assembly official said, “The approach being pursued is to limit voting rights to 20%—or 34% where exceptions apply—rather than restricting equity itself. The government is also giving serious consideration to this proposal.”
The Digital Asset Framework Act discussions extend to the stablecoin issuance structure. The government’s draft is expected to include a “bank 50%+1 share consortium” model, requiring commercial banks to hold a majority stake (over 50%) in entities issuing won-denominated stablecoins. Chairman Yoo said on the 24th, “We will build on the Financial Services Commission’s proposal as the foundation. Since the government’s draft has arrived, both the bank 50%+1 share consortium and exchange equity regulations will all be discussed.”
Opposition voices have emerged within the ruling party. Representative Min Byung-duk, who serves as senior vice chair of the Democratic Party’s Policy Committee, expressed opposition at a National Assembly seminar on the 21st, describing the bank-centered 50%+1 share stablecoin issuance structure as “a means of undermining innovation and protecting the vested interests of the existing banking sector.”
Representative Kim Sang-hoon, chairman of the People Power Party’s Special Committee on Stock and Digital Asset Value-Up, raised concerns about the exchange equity regulation, calling it “a Galapagos regulation with no global precedent for ownership dispersion rules.” He warned, “If equity is forcibly put on the market, the capital capable of absorbing it would likely be Chinese or foreign capital such as Binance, potentially leading to an outflow of national wealth.”
Meanwhile, the National Assembly Political Affairs Committee held a plenary session on the 26th and referred multiple virtual asset-related bills for consideration. Chief among them is a recurrence prevention bill tied to the Bitcoin overpayment incident at Bithumb in February of this year. The package includes amendments requiring virtual asset service providers to segregate user assets at separate addresses, as well as amendments mandating periodic verification of user-entrusted virtual asset balances and the establishment of risk management standards.
Additional bills referred include an amendment requiring “finfluencers” who provide investment consulting on YouTube to disclose their virtual asset holdings; an amendment granting the Financial Services Commission emergency order authority to direct exchanges to restrict trading, suspend withdrawals, or implement system improvements when urgently necessary; and a revision to the Act on Reporting and Using Specified Financial Transaction Information that would abolish the “one exchange, one bank” principle currently requiring each virtual asset exchange to contract with only one bank.
The Financial Services Commission stated to the committee regarding these amendments that “specific user protection measures need to be comprehensively reviewed during the second-stage virtual asset legislation process.” FSC Chairman Lee Eok-won said at the committee’s plenary session on the 24th, “We are fully prepared and will accelerate substantive consultations. We will make every effort to achieve legislation this fall.”
Legislation of the Digital Asset Framework Act was originally slated for completion by the first quarter of this year but was delayed by the U.S.-Iran conflict and local elections. Subsequently, the Ministry of Economy and Finance and the Financial Services Commission reaffirmed plans to complete legislation within the year in last month’s “2026 Economic Growth Strategy” and in reports to the presidential office. Once the government proposal is introduced next month, full-scale parliamentary debate over exchange governance and stablecoin issuance structures is expected to commence.