[Digital Today reporter Sangyeop Oh] The Digital Asset Exchange Alliance (DAXA) made clear it opposes the government's consideration of limiting major shareholders' stake ratios in virtual asset exchanges.

In a statement on Tuesday, DAXA voiced concern that the government's review of a plan to limit major shareholders' stakes in digital asset exchanges to 15 to 20 percent could hinder the development of the domestic digital asset industry and market.

It said the regulatory review would shake the foundation of an industry that has grown on its own. DAXA said digital asset exchanges are at the core of an ecosystem used by about 11 million people. It argued that attempts to artificially change private companies' ownership structures would weaken the industry's competitiveness.

It raised concerns about losing global competitiveness. DAXA said digital assets circulate across borders, and if domestic investment shrinks, users could move to overseas exchanges.

DAXA also said there could be negative effects in terms of user protection. It stressed that major shareholders are not merely financial investors but the parties with final responsibility for users' assets. DAXA said forced dispersal of stakes could dilute responsible management and undermine the broader goal of protecting users.

It also mentioned the possibility of weakening the venture ecosystem. It argued that limiting the ownership structures of private companies that have already entered a growth stage could increase uncertainty for startups and investment and damage entrepreneurship.

On legislation of the Digital Asset Basic Act being pushed in the National Assembly, DAXA added that only system design in line with global standards is a way to protect the national interest, and that Galapagos-style regulation should be avoided.