Can crypto lending return on the back of regulatory wave
Crypto-backed lending is on the rise again, following the wider crypto market crash in 2022 which caused mass loan defaults and liquidation. By mid-2025, Coinbase alone hit $500m in on-chain loans originated; a 10-fold growth achieved within three months of Q2, pointing to newly-emerging opportunities and huge growth potential across the lending space. Nevertheless, South Korea’s Financial Services Commission halted all new crypto lending with immediate effect in August 2025 due to increasingly-overleveraged loans causing a $1bn liquidation event; highlighting the continued risks associated.
All types of credit products are moving on chain which traditional lenders cannot afford to ignore. In…
