South Korea’s Financial Services Commission (FSC) has made headlines with its shocking proposal to restrict major shareholders of cryptocurrency exchanges to ownership stakes ranging from 15% to 20%. This regulatory bombshell was revealed on December 30-31, significantly impacting the industry’s forecast for 2026.

If implemented, this proposal would compel the founders and principal shareholders of Korea’s top five cryptocurrency exchanges to divest large portions of their ownership stakes. This drastic measure has triggered concerns across the sector, raising questions about the future of trading platforms that many have come to rely on.

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A New Year Clouded by Uncertainty

The timing of this announcement, occurring just days before the commencement of the new year, has thrown industry participants into a state of confusion and urgency as they scramble to decipher its implications. Local media outlets were the first to break this crucial story on December 30, which was then picked up by major financial news organizations worldwide. What was initially anticipated to be a celebratory time, filled with optimism for another year of growth in one of the globe’s most dynamic crypto markets, has instead turned into a period marked by anxious speculation and uncertainty about the future of ownership structures in cryptocurrency exchanges.

“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

The proposed Digital Asset Basic Act aims to radically change the landscape of crypto exchanges, transitioning them from founder-controlled private enterprises into quasi-public infrastructures, akin to Alternative Trading Systems (ATS) under Korea’s Capital Markets Act. This transition signifies a momentous change that would go beyond mere ownership limits and delve into the regulatory control of trading frameworks.

The immediate implications of the proposal are significant and diverse:

This proposal also marks a shift from a mere registration system to a full licensing regime, where regulators would perform in-depth fitness evaluations of major shareholders. This level of scrutiny has historically been reserved for conventional financial institutions, highlighting the significant regulatory overhaul on the horizon.

Mega-Deals in Limbo

Two of the most important corporate developments in Korea’s crypto landscape are now significantly hindered. Naver’s anticipated merger with Dunamu, which had the potential to create a fintech giant valued at around 20 trillion won ($14 billion), is now jeopardized. The existing structure—where Naver Pay holds 100% ownership of Dunamu—cannot align with the proposed ownership limitations.

Similarly, Mirae Asset’s acquisition of Korbit is encountering major obstacles. A memorandum of understanding was recently signed with significant shareholders NXC and SK Planet, but the road ahead appears uncertain. Industry insiders express concerns that investing over 100 billion won without establishing management control fundamentally undermines the strategic rationale for the acquisition.

Relaxing the Wall Between Finance and Crypto

One pivotal aspect of the proposed regulations involves relaxing Korea’s stringent division between traditional finance and virtual asset businesses. Since late 2017, following a turbulent period of speculative cryptocurrency investments, the government instituted sweeping regulations. These rules have effectively created barriers that prevent banks, insurers, and other financial entities from investing in or collaborating with cryptocurrency companies. The aim has been to shield the conventional financial system from the inherent volatility and risks associated with digital assets.

Although these prohibitions were never legally formalized, they have nonetheless served to keep established financial institutions out of Korea’s booming crypto market. However, the FSC now appears to realize that attaining ownership dispersion while ensuring market stability necessitates the involvement of established financial players. This evolution could open the door for securities firms and asset managers to take stakes in exchanges, significantly accelerating institutional adoption and fostering developments in security token offerings (STOs) and real-world asset (RWA) tokenization.

Industry Pushback

Exchange operators have not remained silent in the face of these sweeping changes and have voiced strong objections. Concerns center around the potential loss of responsible controlling shareholders, which could generate uncertainty regarding accountability in the event of future challenges. Many contend that it would be more prudent to implement behavioral regulations and restrictions on voting rights rather than forcing the dispersion of ownership as proposed.

Furthermore, there are apprehensions that domestic-only restrictions might inadvertently aid foreign competitors in gaining a greater market share while Korean exchanges struggle to comply with the new regulations. This could set off a chain of consequences that may alter the competitive landscape in the region.

“The government is attempting regulation that goes far beyond market guidelines,” remarked one industry representative. “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 proposed regulations emerge amidst a larger regional effort to formalize the governance framework of crypto exchanges. In 2023, Indonesia launched the first state-backed cryptocurrency bourse, introducing regulations that restrict cross-ownership at 20%. Additionally, Vietnam implemented a licensing regime in September 2025, setting a minimum capital requirement of $378 million and capping foreign ownership at 49%.

However, Korea’s approach is more ambitious as it targets existing market leaders rather than solely regulating new entrants. The requirement for founders of established exchanges to divest substantial ownership is unprecedented in major crypto markets. With 11 million registered users, Korea’s experiment in retroactive ownership dispersion will likely be scrutinized closely by regulators globally, as they also grapple with the challenge of imposing public-utility-style governance on the dominant private platforms.

What Comes Next

The FSC has reiterated that the proposal is still in the draft stage, with officials noting that specifics, such as exact ownership thresholds, remain matters of discussion. legal experts have suggested that a transition period ranging from 5 to 10 years could be provided to allow stakeholders time for gradual compliance, thus easing the potential burden on existing market players.

For the time being, the Korean crypto industry steps into 2026 confronting the potential for its largest structural shift since the inception of the first exchanges over 13 years ago. The upcoming months will play a crucial role in determining whether this regulatory reshaping fortifies the market’s foundations or disrupts the momentum that has positioned Korea as a significant player on the global crypto stage.

How AI legalese decoder Can Help

In the face of such sweeping regulatory changes, navigating the complexities of legal jargon can be daunting for stakeholders within the crypto industry. This is where AI legalese decoder can prove invaluable. By using advanced artificial intelligence, the tool translates detailed legal documents into simpler, more understandable language, enabling industry participants—from executives at exchanges to investors— to comprehend the full extent of the recent proposals and their implications.

With the tool, users can quickly identify key elements of regulatory changes, gauge potential impacts on ownership structures, and prepare for compliance in an efficient manner. By fostering clarity amid uncertainty, AI legalese decoder empowers stakeholders to make more informed decisions, ensuring that they remain ahead of the game in an evolving regulatory environment. As the Korean crypto industry adapts to transformative changes, having access to such a resource can be a significant advantage.