South Korea to unveil crypto lending rules in August as oversight intensifies
Main Idea
South Korea's Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have formed a joint task force to create the country's first regulatory framework for cryptocurrency lending services, amid concerns over leveraged lending by major exchanges like Upbit and Bithumb.
Key Points
1. A joint task force involving the FSC, FSS, and the Digital Asset eXchange Alliance (DAXA) will develop South Korea's first regulatory framework for crypto lending services.
2. The task force was formed in response to concerns over leveraged lending practices by major exchanges such as Upbit and Bithumb, which have extended credit up to 80% of users' collateral.
3. The Bank of Korea has expanded its mandate to include a virtual asset committee, integrating its CBDC teams to oversee stablecoins and other digital assets.
4. Exchanges have been asked to comply with upcoming regulations as the FSC and FSS draft new rules for the crypto lending market.
5. The regulatory push reflects South Korea's efforts to address risks in the fast-evolving digital asset landscape, including leveraged lending and stablecoin oversight.
Description
South Korea’s top financial regulators are preparing to roll out formal guidelines on cryptocurrency lending services in August. This marks a significant step towards greater investor protection and risk management in the country’s fast-evolving digital asset landscape. The move comes as leading exchanges, including Upbit and Bithumb, introduce lending products that allow users to borrow large sums against crypto assets—sometimes up to four times their collateral or 80% of their asset value—rais...
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