Kiwoom Securities in Talks for Bithumb Stake as Regulatory Pressure Mounts

South Korean lawmakers are developing the Digital Asset Basic Act, which would establish a legal framework for cryptocurrencies. The proposed legislation would limit a single shareholder's ownership in a cryptocurrency exchange to 20% in most cases, with possible exceptions up to 34% under conditions still being discussed. That cap could directly affect Kiwoom's potential holding if the deal proceeds.

For Kiwoom, the biggest near-term exposures are the unresolved AML penalty and the privacy violation order. Both create regulatory overhead that could delay the investment or require the brokerage to take a smaller stake. The ownership cap under the pending Digital Asset Basic Act adds longer-term uncertainty: if the law passes with the 20% limit, Kiwoom's stake would be capped regardless of what the current negotiations produce.

The timeline for regulatory clarity is mixed. The Digital Asset Basic Act has no fixed passage date. Bithumb's IPO is targeted for 2028, which gives years to resolve the compliance issues. The privacy fine and AML remediation could force Bithumb to prioritize spending on compliance systems over growth initiatives.

A clear signal from lawmakers that the ownership cap will exceed 20% for strategic investors would reduce the risk. A resolution of the AML penalty that removes the compliance overhang would also help. Stricter enforcement from the Privacy Commission or a new law that locks the 20% cap before the deal closes would increase the risk.

The affected assets are indirect. Bithumb is private, so the exposure flows to Kiwoom Securities, which is also private. For public markets, the impact is on other Korean exchange operators: K Bank (Upbit's banking partner) and Dunamu itself, which has confronted similar regulatory scrutiny. If Kiwoom walks away from the deal, it would signal that regulatory friction is making Korean exchange stakes unattractive even for major financial players.