South Korean financial regulators are set to release comprehensive guidelines for cryptocurrency lending platforms, targeting excessive leverage and insufficient disclosures in volatile digital asset markets. The framework establishes asset eligibility criteria and mandates enhanced risk notifications to protect users.
A joint task force comprising the Financial Services Commission (FSC), Financial Supervisory Service (FSS), and Digital Asset Exchange Association (DAXA) is finalizing the regulations. Key provisions propose a universal leverage cap of four times collateral value, diverging from current practices where exchanges like Bithumb enforce 4x limits while Upbit permits loans up to 80% of collateral.
Concurrently, the Bank of Korea is transforming its central bank digital currency research division into a specialized Virtual Asset Team to strengthen oversight of crypto lending risks. These coordinated measures aim to standardize lending operations, streamline eligibility requirements, and reduce investor exposure to high-risk leveraged products.