South Korea Draft Digital Asset Law Targets 15%-20% Shareholder Cap, Submission This Month

South Korea is considering a 15%-20% cap on the stake a single shareholder can hold in a cryptocurrency trading platform, as a draft digital asset law is targeted for submission this month. According to Odaily, the Financial Services Commission is working to resolve differences among government agencies over the draft and expects it to advance through legislation proposed by lawmakers. The proposed cap could come with a one- to two-year transition period for existing platforms. Regulators are also considering limiting voting rights instead, amid concerns about property rights. The draft would replace a registration system for trading platforms with a licensing system, and stablecoin issuers are expected to take the form of bank-centered consortiums. Proposals also include no-fault liability for losses caused by hacking or system accidents and making violations of actual crypto-asset holding requirements grounds for suspending operations. South Korean Deputy Prime Minister and Minister of Finance and Economy Lee Hyung-il said on November 5 that the government would consult with the National Assembly on delaying the crypto-asset income tax, originally scheduled to take effect next year, by two years. The ruling party favors prioritizing the law to establish an overall regulatory framework and give companies and investors time to adjust.