South Korea’s Crypto Clash: Government’s New Tentacles Will Snag Big Fish

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Well, folks, it appears that South Korea’s shiny new government fad is to tangle itself up in the tangled web of cryptocurrency. The Financial Services Commission, or FSC if you like, has taken it upon themselves to slap a cap on who can own how much of those digital coin-collecting exchanges, despite all them big shots and fancy folks in the industry raising a ruckus bigger than a bull at a China shop.

FSC’s New Game: Limit the Big Fish’s Appetite for Crypto

On a day that’s as ordinary as a Sunday picnic, Chairman Lee Eog-weon, a man with a face that could sell sawdust, revealed that they’re thinking of putting a cap on the big bosses of crypto exchanges-something between a neat 15% and 20%. That’s right, they want to keep the big players from hogging all the hay, claiming it’s to make things fair and square-well, at least fair in their eyes.

Lee, with all the seriousness of a cat in a birdcage, insists that allowing the big money folks to own too much could lead to conflicts of interest and make the markets as crooked as a dog’s hind leg. He says it’s necessary to align blockchain governance with the rules of the “respectable” securities exchanges, which, last I checked, were about as straightforward as a snake in a string bed.

He also boasted that these regulations mainly focus on anti-money laundering and protecting the little guys-though, I dare say, that’s about as likely as finding a honest politician. The new ownership cap will be part of the grand Digital Asset Basic Act, which they’re calling the Second Phase of some Virtual Asset User Protection Act-sounds as protective as a mother bear with a sore paw.

Under the current system, exchanges function on a notification basis needing renewal every three years, but with this new law, they’d get a “permanent” pass-like a lifetime liquor license, but for virtual assets. Naturally, with more power comes more responsibility, or at least that’s what they claim. These exchanges would be declared public infrastructure-because nothing says “trustworthy” like calling your crypto exchange a “public utility,” right?

But hold your horses, partner! The big shots at Upbit, Bithumb, and Coinone, those cats who run the show, think this new cap is a poison pill that’ll stifle South Korea’s budding digital market. If the law passes, big shots like Song Chi-hyung and Cha Myung-hoon would be forced to sell off chunks of their holdings, which’ll probably make their hair stand on end.

The Democratic Party, that parody of a political circus, grumbled that such ownership caps aren’t toothless wonders elsewhere in the world. They reckon it’ll make South Korea look as out-of-step as a cowboy in a tango contest.

The Lawmakers Promise to Wrap This Up Before the Lunar New Year

Meanwhile, the wise folks upstairs at the National Assembly, known as the Digital Assets Task Force, gathered round to discuss their grand plans for the Digital Asset Basic Act. Though they didn’t talk about that cap on ownership, they did whisper that they’re aiming to have this legal framework ready before the Lunar New Year, which, if memory serves, is less than a month away. That’s roughly like trying to herd cats, but they’re determined.

One of their representatives, Ahn Do-geol, boasted they’d be ready by then-though I’d take that promise with a grain of salt larger than a chicken’s egg.

In another twist, they’ve set their sights on stablecoins-those digital currencies that are supposed to stay as steady as a preacher’s word. They’re floating the idea of involving the Bank of Korea and other officials, but the devil’s in the details, and no one seems to agree on who gets to call the shots. The Bank of Korea wants most of the stablecoin pie handed to banks-more than half, in fact-while the Financial Supervisory Service and FSC seem to be throwing rocks at that idea, causing more fuss than a summer picnic in a swarm of bees.

Lawmakers are wrangling about a rule that says if you want to be a stablecoin powerhouse, you’ve got to have at least 5 billion won-about 3.48 million dollars-stashed away, just in case you forget your street address. Yet, nobody’s quite sure if they’ll ever get to issuing a won-pegged stablecoin, or if it’s just a pipe dream for now.

As our good friends at Bitcoinist report, these government folks are like cats and dogs-clashing left and right over who should control the stablecoin playground. The BOK wants a big share for banks, while the FSC thinks that’s overreaching. It’s a regular circus, and I’d advise bringing popcorn.

And so, dear reader, as South Korea juggles these new rules and regulations, one thing’s as clear as mud: the crypto industry’s future there is about as predictable as a frog in a whirlwind. Well, if they thought the wild west had dangers, they ain’t seen nothing yet.

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2026-01-29 10:11