Gov't crypto exchange ownership cap faces constitutional concerns

Gov't Crypto Exchange Ownership Cap Faces Constitutional Concerns

The South Korean government's proposal to cap major shareholders' stakes in virtual asset exchanges has raised constitutional issues. The National Assembly's research body warned that the regulation might infringe on property rights and freedom of business. The Financial Services Commission and the ruling Democratic Party of Korea postponed a policy consultation to review these concerns.

The Digital Asset Basic Act seeks to impose a 20% ownership cap and introduce regulations for stablecoins. Industry officials are worried about disruptions to major mergers and acquisitions, such as Dunamu-Naver Financial share swaps and Binance-Gopax deals. Additionally, the research service highlighted that global jurisdictions like Europe, Hong Kong, and Singapore do not impose such restrictions, suggesting potential inconsistencies with international standards.

Rep. Kim Sang-hoon emphasized the need for thorough legal review to maintain trust in Korea's rule of law. The delayed consultation aims to address these concerns before finalizing the bill.