South Korea’s long-delayed digital asset framework is regaining momentum in Parliament as lawmakers pursue a compromise to bypass a major industry deadlock over exchange ownership rules, according to reports from the National Assembly and the domestic crypto industry on August 26, 2026. The proposed legislation, structured as a comprehensive industry bill, seeks to address systemic gaps left by the existing Virtual Asset User Protection Act.
Proposed Voting Rights Cap to Replace Shareholder Limits
According to reports from the National Assembly, National Policy Committee Chairman Yoo Dong-soo plans to officially introduce a government-backed digital asset bill as soon as the Financial Services Commission (FSC) delivers its official draft, which is expected as early as next month. The primary objective is to secure parliamentary passage before the end of the year.
For months, negotiations stalled due to a sharp disagreement between financial regulators and cryptocurrency exchanges over governance. The FSC previously argued that startup founders and major stakeholders held excessive dominance over exchange infrastructure, pushing for a strict 20% cap on large shareholder equity—with an exception allowing up to 34% for newly entering operators under a three-year grace period.
Industry stakeholders strongly resisted the equity restriction, characterizing it as an infringement on private property rights. This opposition caused a persistent standoff within the Democratic Party’s digital asset task force. To break the impasse, lawmakers and government officials are now actively considering an alternative approach: restricting voting rights rather than outright equity holdings.
According to a parliamentary source cited by Yonhap News Agency, discussions are underway to limit voting rights to 20%, with an exception of 34% for permitted categories, while leaving underlying ownership stakes unrestricted. The government is currently reviewing this compromise.
Legislative Path and Regulatory Scope
Once Chairman Yoo formally submits the revised bill reflecting the government’s framework, the legislation will move to the National Policy Committee’s subpanel for review. It will be evaluated alongside previously introduced digital asset bills. Prior to submitting the package to the subpanel, consultations are scheduled among ruling party members of the committee.
While South Korea enacted the Virtual Asset User Protection Act to safeguard consumer funds, a broader statutory framework governing business scope, asset classifications, and assets like stablecoins has remained missing. The upcoming bill functions as a comprehensive industry act intended to fill these regulatory voids.