South Korea is taking active measures to regulate crypto lending by introducing new restrictions on high leverage offered by leading exchanges.
New Restrictions for Exchanges
South Korea's financial watchdogs have ordered the country's top crypto exchanges to limit the newly launched high-leverage lending services. Upbit and Bithumb, responsible for 70% of trading volumes in the country, were instructed to scale back loans enabling up to four times leverage. These changes came after Bithumb started offering loans on 10 cryptocurrencies using leverage on July 4, 2025.
Task Force on Lending Regulations
On July 31, a task force was formed to develop a regulatory framework for crypto lending. It will consist of industry representatives and government officials. An overview of international practices and stock market rules will precede the issuance of official guidance. Draft rules expected in August will address maximum leverage ratios, eligible assets, and mandatory risk disclosures.
Context of Crypto Regulation in South Korea
These measures fall against the backdrop of continued tightening of crypto trading regulations in the country. Since early 2018, the government has taken several steps, including requiring the registration of all platforms conducting transactions with virtual assets. In 2024, the Virtual Asset User Protection Act was enacted to strengthen legal order in the market and protect users.
The cryptocurrency market in South Korea continues to evolve under new regulations aimed at enhancing transparency and minimizing risks for users. The task force on lending will be a critical step towards further aligning the crypto industry with traditional financial systems.
