South Korea to target leveraged crypto lending services with new rules

The guidelines are expected to cover leverage limits, user eligibility and risk disclosures for crypto lending activities.

South Korea’s financial regulators plan to release guidelines on cryptocurrency lending services next month in an effort to tighten oversight and protect investors amid growing concerns over leveraged crypto products.

The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) on Thursday announced the formation of a joint task force to develop a regulatory framework for crypto lending, according to local media Yonhap News Agency (YNA). The move follows new lending services introduced by South Korean exchanges Upbit and Bithumb.

According to YNA, Bithumb has allowed users to borrow as much as four times their collateral, while Upbit has offered loans worth up to 80% of users’ asset value.