Seoul-based crypto exchange Bithumb announced it is tightening rules on its crypto lending service, reducing leverage and loan limits following a regulatory review.
Changes in Lending Terms
Bithumb has lowered the maximum leverage ratio from 4x to 2x and cut the borrowing limit from 1 billion won ($726,000) to 200 million won ($145,000), representing an 80% reduction. The new limit applies even to high-volume traders with more than 100 billion won ($72 million) in cumulative trades over the past three years.
Regulatory Environment and Lending Services
These changes come as South Korea's Financial Services Commission (FSC) and Financial Supervisory Service (FSS) work with major exchanges to draft new "Virtual Asset Lending Service Guidelines." The framework will include leverage caps, eligible assets, and risk disclosure requirements.
Bithumb's History and Financial Results
Earlier this year, Bithumb reported a dramatic turnaround, booking $110 million in net profit driven by a bull market in digital assets and rising U.S. institutional demand. Profits jumped by 560% year-over-year, while revenue nearly tripled. However, Bithumb has faced a rocky history, including cyber breaches and legal challenges.
Bithumb's tightening of lending rules reflects the company's efforts to comply with regulations and enhance investor protection amid growing interest in cryptocurrencies in South Korea.
