TLDR
- South Korea’s major crypto exchanges are reviving crypto lending services under stricter government regulations.
- Coinone launched a new coin borrowing service that follows the Financial Services Commission’s lending guidelines.
- Upbit reduced its collateral cap by 25% to meet the Financial Services Commission’s requirements for crypto lending.
- Bithumb is revising its crypto lending program to ensure better investor protection and market stability.
- The Financial Services Commission’s new guidelines include borrowing limits and mandatory suitability tests for users.
South Korea’s cryptocurrency exchanges are reviving crypto lending services despite increased government oversight. Platforms such as Coinone, Upbit, and Bithumb have introduced or adjusted their lending programs under new guidelines from the Financial Services Commission (FSC). This move highlights the industry’s effort to maintain growth while adhering to tighter regulations.
Coinone Launches New Crypto Borrowing Service
Coinone, South Korea’s third-largest crypto exchange, launched its “coin borrowing” service on Monday. This service allows users to borrow cryptocurrencies against Korean won collateral, offering leverage-driven trading opportunities. Coinone’s new product enables short-selling, where users borrow crypto, sell it, and buy it back at lower prices if the market falls.
Coinone has confirmed that the new service complies with the FSC’s lending guidelines. The platform sets borrowing limits based on short-selling frameworks, ranging from $22,000 (KRW 30 million) to $51,000 (KRW 70 million). As part of the new offering, customers can pledge as little as $37 and borrow up to 82% of their collateral, with Bitcoin being the only supported cryptocurrency at launch.
Bithumb Revises Crypto Lending Program for Safety
Upbit, the industry leader, reintroduced its lending service last week. The platform adjusted its collateral cap to meet the FSC’s requirements, reducing it from $37,000 to $28,000. The new terms reflect the regulator’s desire to limit exposure to excessive leverage in the market, promoting safer lending practices.
Bithumb, South Korea’s second-largest exchange, has also made revisions to its crypto lending program. The company continues to operate under its previous structure but is reviewing key elements such as borrowing limits and liquidation requirements. A Bithumb spokesperson stated, “We are reviewing borrowing limits, ratios, and liquidation requirements to ensure investor protection and market stability.”
South Korea’s Crypto Lending Market Continues Growth
The FSC introduced new guidelines to curb risks associated with excessive leverage in the crypto market. Exchanges must now use their own reserves to provide loans, limiting borrowing to large-cap cryptocurrencies. Additionally, individual borrowing limits and suitability tests ensure that only eligible users can access the service.
To further protect retail traders, the FSC has set a maximum annualized interest rate of 20%. The new regulations also require exchanges to strengthen disclosure obligations, aiming to promote transparency in lending practices. Authorities hope the new framework will balance innovation with consumer protection.
Despite these regulatory changes, crypto lending continues to grow in South Korea. The combined trading volume of major exchanges like Upbit, Bithumb, and Coinone reaches $5.26 billion daily.
