Korea Venture Business Association Urges Reconsideration of Major Shareholder Ownership Limits in Virtual Asset Exchanges

"Need for Market-Friendly Solutions"

The Korea Venture Business Association has urged financial authorities to reconsider the proposed restrictions on major shareholders' ownership stakes in virtual asset exchanges.

On January 14, the association stated, "While we agree with the government's intention to establish a sound market order, we express concern that artificial ownership regulations could potentially undermine the innovation drive within the domestic venture and startup ecosystem."

Recently, the Financial Services Commission announced plans to introduce the Digital Asset Basic Act, which would limit ownership stakes in domestic virtual asset exchanges to 15-20 percent as a government proposal. The commission also decided to implement ownership dispersion standards to establish a governance structure similar to that of alternative trading systems (ATS).

Regarding this, the association pointed out: ▲ that forced divestment through retroactive legislation poses a significant risk of infringing on property rights; ▲ that such measures could weaken domestic companies' global competitiveness in the digital asset market; and ▲ that regulations threatening founders' management rights could dampen the spirit of innovation in the venture and startup ecosystem. The association emphasized that the dispersion of ownership stakes in virtual asset exchanges should occur naturally according to market principles, rather than through regulation.

The association stated, "As companies grow, enter the capital market, and go public through initial public offerings (IPOs), shareholder structures naturally diversify and checks and balances between ownership and management are established." and continued, "Instead of forced divestment, it is desirable to encourage companies to go public so that ownership dispersion can be achieved in a market-friendly manner."

It added, "We earnestly request that the government promote improvements in governance through market-friendly measures such as encouraging listings, rather than forced divestment, so as to achieve public policy objectives without discouraging corporate innovation."