Catenaa, Monday, September 08, 2025- South Korea’s Financial Services Commission on Friday unveiled strict new rules on cryptocurrency lending, capping annual interest rates at 20 percent and banning leveraged loans that exceed collateral value.
The guideline, aimed at investor protection, requires exchanges to use their own capital and prohibits circumvention through third-party services.
It also mandates advance notification to users facing liquidation risks and restricts lending based on a customer’s experience and transaction history.
Only the top 20 cryptocurrencies by market capitalization, or those traded on at least three licensed domestic platforms, will qualify for lending.
Services must be suspended immediately if an asset is flagged as cautionary by exchanges.
The directive follows an August order halting lending operations at major platforms, including Upbit and Bithumb, after a surge in new lending products. Oversight will fall to the Digital Asset Exchange Alliance, with plans to legislate the rules after reviewing implementation results.
Officials said the move draws on international precedents to establish a clear framework for digital asset lending while tightening investor safeguards in one of Asia’s busiest crypto markets.
