Korea Orders Halt to New Crypto Lending as Leverage Risks Build
South Korea’s Financial Services Commission (FSC) has ordered exchanges to suspend new crypto lending products until formal guidelines are in place, citing mounting risks to users and market stability.
Regulators pointed to a recent incident at Bithumb where more than 27,000 customers tapped lending services in June, with 13% forced into liquidation after collateral values swung against them.
The move by the FSC comes days after analysts at Galaxy Digital published a report where they flagged the growing amount of leverage in crypto markets as a concern.
The administrative guidance, from the FSC allows existing loans to run their course but bars the rollout of new lending services. Officials said that if platforms ignore the directive,…
