Academic and legal circles, along with the virtual asset industry, are increasingly scrutinizing the government’s plan to cap major shareholder stakes in crypto exchanges, noting that the proposal falls short of providing sufficient legal grounds or a convincing industrial policy rationale, according to industry officials and politicians Wednesday. The measure would limit the largest shareholder’s stake to about 15 to 20 percent, reflecting the view of the Financial Services Commission that crypto exchanges function as “quasi-financial institutions” because they hold client assets in custody, facilitate transactions and manage listings. The proposal has emerged as a key issue in drafting the tentatively titled Digital Asset Basic Act, widely referred to as the second phase of virtual asset legislation, with attention focused on how the ruling Democratic Party of Korea (DPK) will ultimately proceed. Experts stress that the regulation requires thorough review before legislation, given its potentially significant impact on industry growth, legal stability and global competitiveness