The Financial Services Commission (FSC) has enacted a new regulatory guideline for virtual asset lending services provided by centralized exchanges, The Block reported today.
The framework explicitly prohibits leveraged loans that are not fully collateralized and sets a maximum annual interest rate of 20%. In addition, it restricts products that require cash repayment, classifying them as unauthorized credit activities.
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The regulation requires service providers to use their own capital, prohibiting the use of third-party services to circumvent the regulation.
User protection measures include risk-based lending limits and mandatory pre-liquidation notifications.
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Eligibility for loans is limited to cryptocurrencies ranked in the top 20 by market capitalization or those listed on three or more authorized national platforms.