South Korea’s Financial Services Commission, the FSC just dropped a bombshell, from now on, no single person or group can own more than 34% of a crypto exchange.
The goal? Prevent concentration of power, reduce risks of insider abuse, and make sure no one can pull an FTX-style rug on users.
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It’s a direct response to past scandals and a sign that Asia’s biggest crypto market is doubling down on control.
What the New Rule Actually Means
The cap applies to voting rights and economic ownership alike, so 34% max for any individual or affiliated entity.
Existing major shareholders (like Upbit’s parent company Dunamu) get a grace period to comply, but new licenses or changes will be blocked if they violate the limit.
The FSC says this aligns with banking-style ownership rules and aims to protect investors by stopping any one player from dominating decisions.
It’s not a total ban on big ownership, just a hard ceiling to avoid “undue influence.”
Exchanges will need to submit detailed ownership structures, and the FSC will monitor for hidden affiliations.
How This Fits Asia’s Tightening Regultory Trend
It’s not new, actually. South Korea has been on this path for years.
After the Terra/Luna collapse and multiple exchange hacks, the country passed the Virtual Asset User Protection Act in 2024, forcing stricter AML, custody rules, and real-name trading.
This ownership cap is just the next logical step, similar to how Japan limits exchange stakes to 20-30% and Singapore requires majority local ownership for major players.
It’s part of a broader Asian trend, Hong Kong caps foreign control in licensed platforms, and even China (despite the ban) indirectly influences through Hong Kong’s rules.
The pattern is clear, regulators want crypto to look more like traditional finance, with guardrails against concentration and abuse. Because this is the way.
The Bigger Picture: Control vs. Innovation
This feels like the classic tension in crypto, aka decentralization vs. regulation.
On one hand, capping ownership prevents another Do Kwon-style disaster where one person controls billions.
On the other, it could scare off founders and investors who want skin in the game.
South Korea is already one of the world’s most active crypto markets, thanks to high retail participation, with strong trading volumes, and this could slow new entrants or push innovation offshore (think Singapore or Dubai).
But it also signals maturity too, because if exchanges are treated like banks, they get more institutional trust and potentially more capital.
TradFi has similar rules (e.g., US bank holding company caps), and crypto is slowly following.
Ownership Caps Matter?
Yes. It means better investor protection, less risk of centralized control gone wrong, and potentially more stable exchanges long-term.
The bad news is that it might reduce founder motivation (why build if you can’t own the majority?), slow innovation, and push talent/money to less regulated jurisdictions.
Retail traders might not feel it immediately, but if fewer new exchanges launch or existing ones get conservative, fees could rise and product development slow.
Protection or Overreach?
Critics will call it heavy-handed, because the cypherpunk ethos you know, crypto was supposed to escape centralized control, and now regulators are imposing it.
Maybe in reality it’s about the balance between advantages and trade-offs. Too much restriction could stifle growth.
But after billions lost to concentrated power failures, the counter-argument is pretty strong, some guardrails are necessary. The data will tell , if trading volumes drop or offshore migration spikes, we’ll know.
At the end of the day, South Korea’s 34% cap is a move toward treating crypto like real finance.
It might protect users, but it could also change how the industry grows. We’ll see if this becomes the new standard in Asia or pushes innovation elsewhere.
Cryptocurrency and Web3 expert, founder of Kriptoworld
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With years of experience covering the blockchain space, András delivers insightful reporting on DeFi, tokenization, altcoins, and crypto regulations shaping the digital economy.
📅 Published: January 29, 2026 • 🕓 Last updated: January 29, 2026
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