#SouthKorea Halts #Crypto Lending Services


South Korea's Financial Services Commission has ordered local exchanges to temporarily suspend crypto lending operations until proper guidelines are established. The regulator cited legal gray areas and high risk of user losses as primary concerns.


Upbit had launched services enabling users to borrow up to 80% of deposit value against $USDT, $BTC, and $XRP in July. Bithumb introduced lending worth up to four times held asset values.


Around 27,600 investors borrowed 1.5 trillion won ($1.1 billion) in the first month after services launched. Due to price fluctuations, 13% of users faced forced liquidation, according to FSC data.


The FSC will develop guidelines to protect users while providing regulatory clarity, indicating willingness to integrate leveraged lending into the existing crypto market system. The move aligns with South Korea's shift toward more open #crypto policies under President Lee Jae Myung's regulation framework.

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August 19, 2025 at 11:44 AM
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