South Korea Moves to Shield Crypto Investors from High-Risk Loans

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Alarmed by the rise of high-leverage crypto lending, South Korean regulators are stepping in with new investor protection rules expected next month.

A joint task force—comprising the FSC, FSS, and DAXA (the country’s top crypto exchange group)—will develop guidelines after exchanges like Bithumb and Upbit began offering loans worth up to 4x collateral or 80% of deposited assets.

The lack of clear safeguards has raised concerns that volatile price swings could trigger massive losses for borrowers. The move reflects Seoul’s broader effort to prevent reckless speculation while allowing regulated crypto growth.

With DAXA’s involvement, the rules may strike a balance between market freedom and risk control.