South Korea’s Financial Services Commission (FSC) has reportedly proposed limiting major shareholders of cryptocurrency exchanges to 15-20% ownership stakes, a regulatory bombshell dropped on December 30-31 that is now casting a long shadow over the industry’s outlook for 2026.

The proposal would force the founders and controlling shareholders of Korea’s top five exchanges to divest significant portions of their holdings.

A New Year Clouded by Uncertainty

The timing of the announcement—just days before the new year—has left industry participants scrambling to assess the implications. A local media outlet first broke the story on December 30, which was subsequently covered by major financial outlets. What was expected to be a celebratory period marking another year of growth in one of the world’s most active crypto markets has instead become a period of anxious speculation about the future of exchange ownership structures.

“The industry entered 2026 under a cloud of regulatory uncertainty,” one exchange executive told reporters. “Deals that were on the verge of closing are now back on the drawing board.”

Sweeping Changes to Governance

Under the proposed Digital Asset Basic Act, the FSC aims to transform crypto exchanges from founder-controlled private enterprises into quasi-public infrastructure, similar to Alternative Trading Systems (ATS) under Korea’s Capital Markets Act.

The impact would be immediate and far-reaching:

The proposal also signals a shift from the current registration system to a full-licensing regime, with regulators conducting fitness reviews of major shareholders—a level of scrutiny previously reserved for traditional financial institutions.

Mega-Deals in Limbo

Two of the most significant corporate developments in Korea’s crypto sector now face major complications.

Naver’s planned merger with Dunamu, which would create a fintech giant valued at approximately 20 trillion won ($14 billion), is directly affected. The current structure—where Naver Pay would hold 100% of Dunamu—is fundamentally incompatible with the proposed ownership caps.

Similarly, Mirae Asset’s acquisition of Korbit, for which a memorandum of understanding was recently signed with major shareholders NXC and SK Planet, faces an uncertain path forward. Industry observers note that investing over 100 billion won without securing management control undermines the strategic rationale for the deal.

Relaxing the Wall Between Finance and Crypto

One significant aspect of the proposal involves easing Korea’s strict separation between traditional finance and virtual asset businesses.

Since late 2017, when the government imposed sweeping cryptocurrency regulations amid a speculative frenzy, authorities have maintained the unwritten rule. It bars banks, insurers, and other financial institutions from investing in or partnering with crypto firms—a policy designed to insulate the traditional financial system from the volatility and risks of digital assets. While never codified into law, this principle has effectively kept established financial players on the sidelines of Korea’s booming crypto market.

The FSC now appears to recognize that achieving ownership dispersion while maintaining market stability requires participation from established financial institutions. This could open the door for securities firms and asset managers to take stakes in exchanges, potentially accelerating institutional adoption and the development of security token offerings (STO) and real-world asset (RWA) tokenization.

Industry Pushback

Exchange operators have responded with sharp criticism. Key concerns include the potential disappearance of accountable controlling shareholders, which could create ambiguity about responsibility when problems arise. Some argue that behavioral regulations and voting rights restrictions would be more appropriate than forced dispersion of ownership.

There are also fears that domestic-only restrictions could inadvertently benefit foreign competitors, with overseas platforms gaining market share while Korean exchanges struggle to restructure.

“The government is attempting regulation that goes far beyond market guidelines,” one industry representative said. “Legislation intended to promote the virtual asset industry and protect consumers could end up infringing on property rights and destabilizing corporate governance.”

Global Implications

Korea’s proposal comes amid a broader regional push to formalize the governance of crypto exchanges. Indonesia launched the world’s first state-backed cryptocurrency bourse in 2023, with regulations limiting cross-ownership between exchanges to 20%. Vietnam introduced a licensing regime in September 2025 requiring a minimum capital of $378 million and capping foreign ownership at 49%.

However, Korea’s approach goes further by targeting existing market leaders rather than just setting rules for new entrants. Forcing founders of established exchanges to divest significant stakes is unprecedented among major crypto markets. With 11 million registered users, Korea’s experiment in retroactive ownership dispersion will be closely watched by regulators elsewhere grappling with how to impose public-utility-style governance on private platforms that have already achieved dominance.

What Comes Next

The FSC has emphasized that the proposal is not final, with officials stating that details including specific ownership thresholds remain under discussion. Legal experts suggest a transition period of 5-10 years could be granted to allow gradual compliance.

For now, the Korean crypto industry enters 2026 facing the prospect of its most significant structural transformation since the first exchanges launched 13 years ago. The coming months will determine whether this reshaping strengthens the market’s foundations or disrupts the momentum that made Korea a global crypto powerhouse.