Korean Exchanges Face New Rules as Regulators Target Crypto Lending
South Korea’s financial watchdogs are tightening the screws on crypto lending, with new regulations set to drop next month—directly impacting exchanges like Upbit and Bithumb.
The FSC and FSS have assembled a task force, including DAXA (the self-regulatory body for major exchanges), to draft rules after these platforms rolled out high-leverage loan products. Bithumb allows 4x borrowing against collateral, while Upbit offers loans covering 80% of asset value.
The rapid growth of such services—without clear risk controls—has spooked regulators, who fear retail investors could face steep losses in a downturn.
The upcoming rules could force exchanges to cap leverage, enforce stricter collateral rules, or add risk disclosures—potentially cooling Korea’s booming crypto lending market.
