South Korean authorities have ordered cryptocurrency exchanges to stop offering lending services, citing high risks for investors.
The Financial Services Commission (FSC) announced the suspension today, requiring exchanges to comply immediately until proper regulations are in place. This follows the launch of lending products by major platforms like Upbit and Bithumb, which allowed users to borrow against their crypto or cash deposits.
The FSC had previously flagged these services as legally ambiguous and prone to potential user losses. Upbit and Bithumb had already paused lending once before, with Bithumb later reinstating it under stricter conditions.
The move highlights growing regulatory scrutiny in South Korea, where lawmakers are debating the Digital Asset Basic Act—a bill that could legitimize crypto lending under strict oversight.
