Kim Yong-beom, former presidential chief of staff for policy, speaks at a Cabinet meeting, Aug. 25. Yonhap
Korea’s cryptocurrency industry is weighing the prospect of regulatory relief following the sudden resignation of presidential chief of staff for policy Kim Yong-beom, who had aggressively pushed to curb major shareholder dominance in local crypto exchanges, industry officials said Thursday.
Kim submitted his resignation Monday amid continued criticism that single-stock leveraged exchange-traded funds (ETFs) introduced in May under his leadership have been contributing to heightened stock market volatility. President Lee Jae Myung accepted his resignation Tuesday, with no successor named yet.
Kim, a former senior financial bureaucrat who previously headed the crypto think tank Hashed Open Research, was initially expected to foster pro-industry regulations upon taking office in June 2025. Instead, his tenure saw a push to cap major exchange shareholders’ equity at 20 percent, which would force founders to sell their excess stakes.
The industry, which believed Kim played a significant role in shaping the regulation, has mounted fierce opposition to the proposed equity cap, arguing that forcing major shareholders to sell their stakes would violate property rights, undermine management stability and hamper investment.
Against this backdrop, Kim’s departure has raised hopes that the proposed regulation could be revised in a less restrictive form in the government’s digital asset bill.
Still, the proposed equity cap is unlikely to be scrapped entirely, as financial regulators remain wary of excessive control by major shareholders over platforms that handle massive retail trading volumes.
As a result, compromise measures that would limit voting rights rather than require major shareholders to sell their stakes are gaining traction.
Measures under discussion reportedly include allowing major shareholders to retain their stakes while limiting voting rights to 20 percent in principle. An exception could allow voting rights of up to 34 percent under specific regulatory conditions.
The approach seeks to curb major shareholders’ influence over management without forcing them to sell their existing stakes, easing concerns over potential violations of property rights.
“Even if the draft is near completion, we hope the departure of its strongest proponent signals a likely shift in regulatory tone,” an official at a Seoul-based crypto exchange said.
The Financial Services Commission, the country’s top financial regulator, aims to finalize the tentatively titled Digital Asset Basic Act, widely referred to as the second phase of virtual asset legislation, this month. However, officials acknowledged that final coordination could be delayed until Lee appoints a new policy chief.