South Korea weighs crypto exposure and exchange share limits

• South Korea may let listed firms and professional investors put up to 10% of their equity capital into crypto assets
• Regulators plan ownership caps for major crypto exchange shareholders, raising concerns over control and innovation

South Korea is weighing a series of policy changes that could reshape how corporations and financial institutions interact with digital assets, while also redefining ownership structures in the country’s crypto exchange sector. Regulators are considering allowing listed firms and professional investment companies to allocate a larger share of their equity capital to crypto, even as they push ahead with controversial plans to curb major shareholdings in exchanges that authorities now describe as part of public financial infrastructure.

South Korea reviews corporate crypto investment cap

Regulators in South Korea are examining a proposal that would let publicly traded companies and professional investment entities commit up to 10% of their equity capital to crypto assets. This would double the earlier ceiling of 5% and follows the January 11 announcement ending a nine-year prohibition on corporate crypto investment. Industry reaction to the initial change was muted, as many participants felt the allocation remained too narrow.

Corporate crypto adviser Rich O, who works with local companies, told Cryptopolitan the shift is a step forward but warned the cap could still limit meaningful participation. He argued that a 5% limit is not workable in practice because crypto markets move quickly and many firms combine cash and digital assets in their accounting. Rapid price moves could push holdings over the threshold without any new purchases, he said, then force sales solely to stay within the rule.

He pointed to the risk that a sharp rise in bitcoin could leave firms non-compliant overnight, turning the cap into a trigger for forced selling. In his view, this clashes with the very nature of crypto markets, where volatility and constant price changes are defining features. Rich O suggested that officials may be wary of listed companies adopting strategies similar to those used by MicroStrategy, which was renamed Strategy in 2025 and has become the largest corporate holder of Bitcoin, with about 650,000 coins reported. He expects that, despite current caution, the government may widen the cap further in the years ahead.

Corporate demand for crypto and stablecoins in South Korea

On the ground, interest from South Korean companies in digital assets appears broad-based. Iris (Sungyoun) Park, co-founder of web3 consultancy firm DELV and a lawyer focused on crypto, said there is strong appetite among corporates to diversify portfolios with digital assets. She described diversification as crucial for corporate survival in the current environment, pointing to imbalances across domestic asset markets.

Park noted that South Korea is experiencing pronounced gaps in asset values. She highlighted that house prices and gold have surged, while the price of bitcoin has not followed the same trajectory. Against that backdrop, firms are exploring digital assets as an additional pillar in their balance sheets rather than a replacement for traditional holdings.

According to Park, many South Korean companies are also looking beyond simply owning crypto and are interested in using stablecoins to settle international transactions. Stablecoins, in this context, are viewed as tools for cross-border business rather than purely speculative assets. She said there is a widely held view in local corporate circles that engaging with crypto is necessary to keep pace with global business practices.

However, Park does not share the expectation that officials will quickly raise the permitted equity share for crypto investments. She pointed out that the country is already moving to introduce spot bitcoin exchange-traded fund trading as part of a broader economic strategy. In her assessment, this development could moderate the urgency of lifting the corporate investment cap further, as it gives institutions another regulated avenue for bitcoin exposure.

South Korea seeks new governance for crypto exchanges

While loosening restrictions on corporate crypto investment, South Korea is also pursuing tighter control over who can own and influence the country’s crypto trading platforms. Authorities are working on a policy to restrict major shareholders in exchanges to holdings between 15% and 20%. The Financial Services Commission (FSC) has argued that this step is needed to avoid conflicts of interest and to align exchange governance with their growing role in the financial system.

FSC Chairman Eog Weon Lee has described crypto exchanges as a form of public infrastructure. At a press conference on January 28, he said that once exchanges are formally recognized as part of the financial system, their governance must reflect that status. In his view, capping ownership is one way to ensure that platform management and shareholder structures are consistent with the public functions they now perform.

Corporate adviser Rich O, however, has cast the proposed cap in a different light. He contends the measure is less about consumer protection and more about influence over how future KRW-denominated stablecoins will be distributed. According to him, government agencies do not want a small number of exchanges, such as Upbit and Bithumb, to dominate the issuance and circulation of future KRW stablecoins.

He argued that the policy is designed to dilute the power of major shareholders by spreading stakes among more, smaller investors. This, he said, would make exchanges more manageable from the perspective of regulators and policymakers, who would then face counterparties with less concentrated control. As an example of the potential impact, he noted that the co-founder of Dunamu, which operates South Korea’s largest crypto exchange, could be required to sell a significant portion of his holdings. Chi Hyung Song currently owns 25% of Dunamu, and the proposed limit could force him to divest 10%, representing about 3 trillion KRW. The cap could also undermine plans by internet giant Naver to acquire 100% of Dunamu’s shares, as full control would no longer be allowed under the new regime.

Backlash against ownership limits and concerns over innovation

The proposal to impose shareholder caps on crypto exchanges has drawn strong criticism from within South Korea’s digital asset industry and academic circles. The Digital Asset eXchange Alliance (DAXA), which represents the country’s five largest cryptocurrency trading platforms, warned that the rule would obstruct sector growth. They argue that constraining ownership at this stage could stunt the development of a market that is still evolving.

Debate has also reached the National Assembly, where a group of scholars labeled the cap “excessive” and said it has no counterpart in other major jurisdictions. Professor Yoon Kyung Kim from Incheon National University argued that diversified ownership structures usually emerge as firms grow and seek capital, rather than being mandated at an early stage. She warned that imposing shareholder restrictions from the outset could increase uncertainty for management teams and delay substantial investment decisions.

Kim further cautioned that such constraints could weaken South Korea’s competitiveness and damage its fintech innovation ecosystem. She sees a risk that the country could fall behind other markets if it enforces rules that deter large-scale investments and limit entrepreneurial flexibility in the crypto exchange sector. Professor Cheol Woo Moon from Sungkyunkwan University raised additional concerns about legal and constitutional implications. He suggested that compelling shareholders to sell their stakes could infringe on the rights of private business owners and potentially lead to court challenges and constitutional appeals.

Rich O, examining the political and economic context, expressed doubt that the shareholder cap will advance smoothly through the legislative process. Nonetheless, FSC Chairperson Eok Won Lee has reiterated his intention to press ahead with implementing the limits on exchange ownership, signaling that regulators remain committed to this approach despite opposition.

Conclusion

South Korea is moving on two fronts as it recalibrates its stance on digital assets. On one side, regulators are preparing to let listed companies and professional investors allocate up to 10% of their equity capital to crypto, following the end of a long-standing ban on corporate investment. On the other, policymakers are pushing to restrict major shareholdings in crypto exchanges, arguing that these platforms now function as public infrastructure and require governance structures to match. Industry advisers and academics have questioned both the practicality of strict caps in a volatile market and the broader impact of ownership limits on competitiveness and innovation. As debates continue, South Korea’s evolving framework for corporate crypto use and exchange governance will play a central role in shaping the country’s digital asset landscape.

Disclaimer

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