South Korea Gets Ahead of Crypto Lending Risks with New Task Force

South Korea isn’t waiting for a crypto lending crisis to act—regulators are preemptively drafting rules to rein in high-risk loan products.

The FSC and FSS have teamed up with DAXA, the exchange alliance, to create guidelines after Bithumb and Upbit launched services allowing 4x leverage and 80% asset-backed loans.

Unlike traditional finance, crypto lending currently operates without clear safeguards, leaving borrowers exposed to liquidation risks in wild market swings.

By involving industry players early, South Korea hopes to strike a balance: keeping crypto innovation alive while shielding investors from avoidable disasters.

The rules, due next month, could become a model for other nations grappling with decentralized finance risks.