Korean Exchanges Reject FSC Plan to Cap On-Exchange Crypto Holdings
DAXA publicly rejected the government proposal to cap user cryptocurrency balances on domestic trading platforms, saying the measure is inappropriate for protecting investors and for the healthy development of the market. The alliance’s pushback came after the Financial Services Commission advanced the cap as part of broader efforts to reduce systemic risk and improve consumer protection in the wake of high-profile crypto failures.
The dispute matters because tightening custody limits could reshape where and how users hold assets, with industry observers warning it may push activity offshore or into private wallets, reduce liquidity at local venues, and complicate supervision. The clash sets the stage for a policy tug-of-war between Seoul’s safety-first approach and exchanges arguing for proportionate rules; stakeholders will watch upcoming consultations and any formal regulatory revisions closely.