South Korea's financial regulators, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), have expressed concerns about the recent crypto lending and margin trading services launched by Upbit and Bithumb. These services allow up to 4x leverage for short-selling with borrowed funds, leading to potential risks for investors without sufficient safeguards. Subsequently, Upbit paused its Tether lending service after indicating it could violate South Korea's Lending Business Act. Bithumb modified their operations but retained the 4x leverage. Experts warn that stricter domestic regulations could drive users to offshore platforms with weaker oversight, increasing risks of fraud and loss. In related developments, the Bank of Korea emphasized its role in managing crypto markets by transitioning its Digital Currency Research Lab into an oversight body and pushing plans for spot crypto ETFs, indicating a regulatory shift to address investor protection and market stability.

Source 🔗