Major South Korean cryptocurrency exchange Bithumb has significantly reduced the maximum loan amounts and leverage ratios offered on its platform, responding sharply to intensifying regulatory concerns surrounding high-risk lending products.
Effective immediately, the exchange has cut the maximum leverage available to users from 4x down to 2x. Simultaneously, the cap on lending amounts has been drastically reduced by 80%, lowered from 1 billion won (approximately $726,000) to 200 million won ($145,000).
These measures come in direct response to heightened scrutiny from South Korean financial authorities. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) recently established a dedicated task force focused specifically on mitigating risks associated with crypto lending offerings within the country.
The regulatory action and Bithumb’s subsequent changes occur against the backdrop of extensive cryptocurrency adoption in South Korea. Reports indicate that over 25% of individuals aged 20 to 50 in the country own cryptocurrency, with ownership peaking at approximately 31% among people in their 40s.
Bithumb stated that the reduced limits and leverage are implemented to enhance risk management and align with evolving expectations for greater user protection in the cryptocurrency sector.