South Korean financial regulators plan to introduce strict guidelines next month targeting leveraged crypto lending services, with the aim of protecting investors.
The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have formed a joint working group to draft the rules, following reports that major platforms such as Upbit and Bithumb are now offering loans with high leverage, some as high as 4 times the value of the collateral or 80% of the value of the assets.
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Without clear protective measures, regulators fear that sudden market fluctuations could ruin borrowers, prompting urgent oversight. The working group includes officials from the FSC, FSS, and DAXA, South Korea's cryptocurrency exchange alliance.