South Korea's financial regulators are set to release new guidelines on cryptocurrency lending services aimed at tightening oversight and protecting investors. The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have established a task force to create a regulatory framework in response to the excessive risk and lack of clear safeguards for investors linked to leveraged crypto products. Major exchanges like Upbit and Bithumb have introduced services allowing users to borrow substantial amounts against their collateral, raising concerns over potential losses from market fluctuations. The forthcoming guidelines will encompass leverage limits, user eligibility, risk disclosures, and transparency requirements for lending activities. Additionally, exchanges are urged to assess high-risk lending services. Simultaneously, the Bank of Korea is enhancing its approach to virtual assets, changing its digital currency research team to focus on broader crypto discussions. The new regulatory framework aims to lay the groundwork for future legislation, emphasizing increased accountability within the digital asset sector.

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