With the financial authorities signaling an easing of the "separation of finance and virtual assets" restriction that limits the financial sector's participation in the virtual market, consolidation and realignment between major financial firms and exchanges are expected to accelerate. The financial authorities believe that the participation of large financial companies in management is necessary to improve the governance of virtual asset exchanges and strengthen internal controls.
According to the financial sector on the 26th, the financial authorities are reviewing the separation rule in light of Hana Financial Group's move to acquire equity in Dunamu, the operator of Upbit.
Lee Eog-weon, the Financial Services Commission (FSC) chair, also suggested on the 21st at a press briefing the possibility of easing the separation rule, saying, "The global market environment has changed, and legislation to institutionalize virtual assets is being pushed forward, so we need to look comprehensively at the changed situation."
Within the financial authorities, some say large financial firms should be allowed to participate in the market to strengthen internal controls at virtual asset exchanges. As virtual asset exchanges are being incorporated into the institutional financial sector through the Basic Act on Digital Assets (Virtual Assets Phase 2), the aim is to bolster internal controls through collaboration with major financial companies.
A senior official at the financial authorities said, "The internal control systems of virtual asset exchanges still have a long way to go. They need to establish internal control measures at the level of existing financial firms." Another official at the financial authorities said, "Exchanges will likely receive substantial equity investments from large financial firms to strengthen internal controls and avoid large shareholder equity limits."
Major financial firms are already moving one after another to invest in equity stakes in virtual asset exchanges. Mirae Asset Group is proceeding to acquire a 92.06% equity stake in Korbit through its nonfinancial affiliate Mirae Asset Consulting. In the industry, there is analysis that Mirae Asset Group put forward Mirae Asset Consulting as the acquirer to avoid the separation regulation.
Korea Investment Holdings is also strongly considering a plan to secure about a 20% equity stake in Coinone, and Hanwha Investment & Securities plans to increase its Dunamu equity stake from the current 5.93% to 9.84%.
The separation rule is a kind of "shadow regulation" that has restricted financial firms from directly holding virtual assets or investing in exchange equity since the government-wide virtual asset measures were implemented in 2017. It is not a concept specified in law or supervisory regulations but one maintained through authoritative interpretations and administrative guidance.
As major global countries have recently begun in earnest to bring virtual assets into the institutional financial system, there is growing criticism that the separation rule is an outdated regulation. Hwang Hyun-cheol, a professor at Hongik University, said, "Rather than a dichotomous regulation, we should selectively incorporate virtual assets within the traditional finance risk management framework and give existing operators opportunities to participate to foster the industry."