South Korea is preparing strict new guidelines to regulate crypto lending services, especially those offering high leverage, amid growing concerns over investor safety and market volatility.

The country’s top financial regulators—the Financial Services Commission (FSC) and Financial Supervisory Service (FSS)—have announced the launch of a joint task force to draft a framework targeting leveraged crypto loans. The move follows reports that major exchanges like Bithumb and Upbit are offering loans worth up to 400% of collateral or 80% of users' asset value, respectively.

The task force will include representatives from both agencies and the Digital Asset eXchange Alliance (DAXA), a coalition of major Korean exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax. It will work on setting leverage limits, user eligibility criteria, risk disclosure protocols, and transparency standards in lending-related activities.

Authorities have also asked exchanges to evaluate and potentially withdraw high-risk or legally ambiguous services such as excessive leverage and fiat-based lending. The upcoming guidelines aim to establish a safer digital asset market and serve as a foundation for future crypto legislation.

Meanwhile, the Bank of Korea has upgraded its existing central bank digital currency (CBDC) team into a broader Virtual Asset Team. This new committee will oversee matters related to stablecoins and collaborate with government bodies during the legislative process.

Investor interest in digital assets continues to grow in South Korea. In June, stocks of banks like Kakao Bank, Kookmin Bank, and Industrial Bank of Korea spiked by 10% to 19% after filing stablecoin-related trademarks, according to Google Finance.

The coordinated crackdown signals South Korea’s intent to create a safer, more regulated environment for crypto users and investors alike.