A proposed regulation that would restrict significant shareholders’ ownership holding in cryptocurrency exchanges to 20% is being considered by the South Korean government.
The Financial Services Commission (FSC) of the nation and the digital asset task team of the ruling Democratic Party are said to have discussed the suggestion.
The plan would provide cryptocurrency exchanges three years to modify their ownership structures to comply with the new cap. A three-year grace period may be extended for smaller exchanges.
The greatest changes would probably be made to major platforms like Upbit and Bithumb, which together dominate around 90% of South Korea’s cryptocurrency industry.
Now, there are several exchanges above the suggested cap. For instance, the main business of Bithumb controls over 73% of the exchange, whereas the chairman of Upbit owns more than 25%.
The regulation’s supporters claim that it might reduce the industry’s power concentration and enhance governance.
However, some warn that the tactic can hinder innovation and limit competition. Several lawmakers have also expressed concerns that the restriction would discourage investment in the sector.
The issue is currently undergoing a drawn-out political process and has not yet been properly submitted in the National Assembly.
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