In response to growing concerns about leveraged crypto products, South Korea's financial regulators plan to release official guidelines on cryptocurrency lending services next month.
Formation of Regulatory Task Force
The Financial Services Commission and Financial Supervisory Service of South Korea announced the formation of a joint task force to develop a regulatory framework for crypto lending. This follows new lending services launched by local exchanges Upbit and Bithumb.
Approaches to Forming New Rules
The task force will include representatives from FSC, FSS, and the Digital Asset eXchange Alliance (DAXA), a self-regulatory organization formed by five major crypto exchanges. New guidelines will consider international regulations and the intricacies of the local crypto market.
Establishment of Virtual Asset Committee
The establishment of the lending task force coincides with the Bank of Korea's decision to form a Virtual Asset Team, tasked with addressing stablecoins and other crypto assets. The committee will collaborate with the government during the legislative process.
Thus, the efforts of South Korean regulators aim to protect investors and create a clear regulatory framework for cryptocurrency lending amid a developing market.
