[Bitcoin Now] Controversy Over Push to Limit Virtual Asset Exchange Ownership Stakes... Industry Says "Market Principles Undermined"

Push for Ownership Limits Under Phase 2 Virtual Asset Law
Founders' Management Control at Upbit, Bithumb, and Others at Risk

Virtual asset exchanges are now facing the government's regulatory scrutiny over ownership stakes. This comes as financial authorities are considering forcibly limiting ownership stakes under the Digital Asset Basic Act (the second-phase virtual asset bill). The virtual asset industry is strongly protesting, calling it an anti-market, draconian law that infringes on private property rights.

According to industry sources on January 8, financial authorities have recently expressed their intention, through the "Coordination Plan on Key Issues of the Digital Asset Basic Act," to cap the ownership structure of virtual asset exchanges at 10-15%, the same level as Alternative Trading Systems (ATS) under the Capital Markets Act.

Under the current Capital Markets Act, ATS are prohibited from holding more than 15% of voting shares. Authorities are now seeking to apply this restriction to virtual asset exchanges as well.

The industry is fiercely opposing the move. This is because the regulation would be a "retroactive regulation" targeting already established private companies. ATS are subject to "preemptive regulation," having been established in accordance with legal standards from the outset. In contrast, adjusting the ownership structure of virtual asset exchanges would forcibly overhaul the governance of companies that have long been built on private capital.

If the regulation becomes reality, there is a possibility that the stakes held by Song Chi-hyung, Chairman of Dunamu (Upbit) (about 25%), Cha Myung-hoon, Chairman of Coinone (54%), and Bithumb Holdings' stake in Bithumb (73%), could come under pressure to be reduced or sold off.

This could result in founders losing management control. An industry insider argued, "If the government sets a precedent of being able to seize and redistribute companies grown amid uncertainty at any time, the domestic startup ecosystem will collapse."

There are also concerns that this could send a negative signal to global capital markets. Major capital investments are ongoing, such as Mirae Asset Financial Group's acquisition of Korbit and the partnership between Naver and Dunamu. In this environment, forced ownership restructuring could signal to foreign investors that "Korea lacks legal stability."

Industry participants agree that while they understand the intent to enhance the public nature and transparency of exchanges, the government should encourage natural diversification of ownership through market mechanisms, rather than forcibly redistributing stakes.

Coinbase, the largest virtual asset exchange in the United States, raised capital through a Nasdaq listing. In this process, institutional investors like Vanguard and BlackRock became shareholders, naturally achieving checks and balances between ownership and management. In contrast, Korean authorities have delayed recognizing the legal status of virtual asset companies or allowing them to go public, while only resorting to the extreme measure of forced divestment.

An industry official emphasized, "If the government's slogan of 'the KOSPI 5000 era' is to be more than just an empty catchphrase, it must first repeal regulations that hinder the growth of new industries. Artificial ownership restrictions undermine incentives for innovation and lead to management inefficiencies, so it is urgent to implement policies that create a virtuous cycle where shareholder composition is diversified through entry into the capital market."