The Financial Services Commission of Korea (FSC) officially released new guidelines today (5), establishing clear regulations for cryptocurrency lending services provided by centralized exchanges.
According to the official statement, these guidelines reference international cases, clearly defining the scope of 'virtual asset lending services' and proposing multiple measures to protect investors.
Among them, the most notable regulations include: prohibiting loans exceeding the collateral value for leveraged loans; lending rates must not exceed the cap of '20% annual interest'; and prohibiting users from repaying cryptocurrency loans in cash, otherwise they will violate credit business regulations.
In addition, platform operators must use their own assets when providing cryptocurrency lending services to prevent regulatory evasion and are prohibited from indirectly providing lending services through third-party cooperation or outsourcing.
The new guidelines simultaneously incorporate investor protection regulations. Investors using cryptocurrency lending services for the first time must pass an online education and eligibility test conducted by the Digital Asset Exchange Alliance (DAXA), a self-regulatory organization formed by Korea's four major exchanges.
In addition, the platform must set individual lending limits based on the user's borrowing service experience and transaction history; if the user's borrowing position faces liquidation risk, they must be notified in advance and allowed to add collateral assets.
Lending services are limited to mainstream cryptocurrencies.
In terms of asset scope, only cryptocurrencies ranked within the top 20 by market capitalization, or those listed on at least three local licensed exchanges, can be included in lending services. If any cryptocurrency is listed as 'Trading Alert' or 'Abnormal Trading', the lending service for that asset must be immediately suspended.
The Korean FSC stated that the new guidelines are effective immediately, to be overseen by DAXA, and further legislative actions will be driven based on the implementation results to establish new rules.
New guidelines are temporarily halted before their release! Korea's 'Cryptocurrency Lending Services' are fully suspended.
"Korea launches 'Cryptocurrency Lending Guidelines': annual interest rate cap of 20%, leverage loans strictly prohibited" this article was first published on (Blockcast).