Noise is arising as the Financial Services Commission pushes the Digital Asset Basic Act (second-phase virtual asset bill), which includes a plan to cap major shareholders' equity in virtual asset exchanges at 15%–20%. The Financial Services Commission has discussed the bill with lawmakers on the Democratic Party of Korea digital asset task force (TF), but because the TF opposed the equity cap, the commission is trying to bypass the TF and meet the party's policy committee directly to push through the major-shareholder equity cap.
According to a compilation of ChosunBiz reporting on Feb. 5, the Financial Services Commission met last month with lawmaker Han Jeong-ae, chair of the Democratic Party of Korea policy committee, and urged that the major-shareholder equity cap be included in the second-phase virtual asset bill. The second-phase virtual asset bill had originally been slated to be introduced after the digital asset TF gathered opinions from industry, academia and relevant ministries, and then passed it through the policy committee.
The TF holds a negative view of the Financial Services Commission's cap on major shareholders' equity in virtual asset exchanges. On Dec. 23 last year, when the Financial Services Commission gave its fourth briefing to the TF, it first brought forward the major-shareholder equity cap. At the time, the TF mainly argued, "The purpose of crafting the second-phase virtual asset bill is to foster the industry, and a cap on major shareholders' equity runs counter to that," and, "It cannot be included in the second-phase bill, so let's discuss it when introducing a third-phase bill later."
Then on Jan. 29, the TF finalized a draft of the second-phase virtual asset bill and reported it to the policy committee. It did not include the major-shareholder equity cap. However, the policy committee said, "Let's include the major-shareholder equity cap as the Financial Services Commission proposed." When the TF said, "If that happens, the TF cannot introduce the bill," Chair Han Jeong-ae reportedly replied, "Then I will introduce it myself (as the Financial Services Commission proposed)."
A lawmaker belonging to the TF said, "When the major-shareholder equity cap was blocked in the TF, the Financial Services Commission met Chair Han directly in January to persuade her. They ignored procedure and arbitrarily bypassed the TF, and to be honest, I am very upset."
After the policy committee sided with the Financial Services Commission, the virtual asset industry was upended. The Korea Fintech Industry Association (KORFIN), the Korea Internet Corporations Association and others issued successive statements expressing concern about the major-shareholder equity cap. On the 4th, the TF and heads of the five major exchanges hastily held a roundtable. At the meeting, people reportedly said, "Now we need to persuade the policy committee," and, "There is nothing the TF can do."
With the likelihood of an exchange equity cap growing, the virtual asset industry is deflated. One official said, "Can a cap on major shareholders' equity be a law in a capitalist country? If this is how it is, I don't know why the TF was created."
Another official said, "Overseas, authorities verify major shareholders' fitness and regulate in various ways to ensure responsible management. Throwing out all those methods and looking only at the equity ratio is a textbook case of administrative convenience. I question whether this considers fostering the virtual asset industry."