South Korea Caps Crypto Lending at 20%, Bans Leveraged Loans
- South Korea enforces a 20% cap on crypto lending, bans leverage.
- Regulation targets high-risk lending practices in the crypto market.
- Aims to bring stability and transparency to the sector.
South Korea’s financial regulators have imposed a 20% cap on crypto lending rates and banned leveraged loans across exchanges as of September 5, 2025.
This regulatory shift aims to curb high-risk crypto activities, enhancing market stability and transparency, potentially impacting major platforms like Upbit and Bithumb significantly.
South Korea caps crypto lending rates at 20% and bans leveraged loans, effective September 5, 2025.
New regulations aim to enhance transparency and stability in the crypto market, impacting lending practices immediately.
South Korea Limits Crypto Lending to 20% Maximum
South Korea’s financial regulators have imposed a 20% cap on crypto lending rates. Leveraged loans are banned as of September 5, 2025, to stabilize the market.
The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) lead this regulatory initiative. Digital Asset Exchange Alliance (DAXA) oversees compliance and user education.
Major Exchanges Like Upbit Impacted by New Rules
The cap and ban affect major exchanges like Upbit and Bithumb. These regulations aim to reduce high-risk lending and prevent volatile liquidations.
According to a spokesperson from the Financial Services Commission (FSC), “Exchanges must not offer lending services that operate in a legal gray zone…”
Investors and exchanges see new constraints on lending, potentially reducing market volatility and enhancing stability in the broader financial system.
Past South Korean Regulations on Lending Practices
Previous regulations in South Korea and Japan also targeted crypto lending. Similar approaches have historically focused on illicit transfers and high leverage.
Data suggests reduced institutional risk in South Korea’s $500B personal loan sector, highlighting the potential for increased financial stability.
Mitrade’s Risk Disclosure Statement provides additional context on the impact of regulatory changes.
| Disclaimer: The information on this website is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are volatile, and investing involves risk. Always do your own research and consult a financial advisor. |
