Korea Fintech Industry Association Raises Concerns Over Ownership Dispersion Regulation for Digital Asset Exchanges, Citing Risks to Innovation

As financial authorities are considering ownership dispersion regulations that would limit the maximum shareholder stake in digital asset exchanges to 15-20%, the Korea Fintech Industry Association has expressed concern, stating that such regulations could undermine the foundation for innovation and growth in Korea's digital asset industry.

In a statement released on February 3, the association said, "We express deep concern that if this regulation becomes a reality, it will hinder digital financial innovation in Korea and erode our global competitiveness."

The association pointed out, "If governance and leadership, which are the core drivers of innovative industries, are administratively adjusted, it could weaken the speed and accountability of decision-making across the industry."

It added, "One of the main reasons for the slow digital transformation and overseas expansion of Korea's traditional financial sector has been its rigid governance structure, which makes it difficult to respond quickly to rapidly changing financial environments. In this context, the proposed ownership dispersion regulation would impose an excessive burden on the entire digital asset industry."

The association also addressed the issue of regulatory fairness. It stated, "At a time when Korea, with its high digital adoption and strong digital content competitiveness, should be leaping into the global market by realizing new payment models such as nano-payment—which were difficult to implement under the traditional financial system—it is hard to find a policy justification for preemptively applying ownership dispersion regulations exclusively to the digital asset industry."

The association further emphasized, "We urge the creation of a policy environment that enables governance improvements through market-friendly and autonomous methods, such as strengthening market oversight via encouraging initial public offerings (IPOs), introducing accountability structures, imposing environmental, social, and governance (ESG) obligations, and enhancing the independence of outside director appointment procedures (by limiting recommendation rights of major shareholders and management). We hope that by broadly gathering opinions from stakeholders in industry, academia, and the legal sector, a rational policy direction can be established that harmonizes user protection and industrial innovation."

This content was produced with the assistance of AI translation services.