According to ChainCatcher and Yonhap News, the Korean Financial Services Commission and Financial Supervisory Service summoned executives from five virtual asset exchanges on July 25th, expressing concerns about the cryptocurrency lending services recently launched by Upbit and Bithumb. They pointed out potential legal disputes, insufficient user protection measures, and the possibility that leveraged investments could affect the stability of operators.
Previously, Bithumb launched a service on the 4th allowing borrowing of up to 4 times cryptocurrency using assets or Korean won as collateral, supporting 10 cryptocurrencies; Upbit simultaneously launched a service for 3 cryptocurrencies with a maximum lending limit of 80%. Such services allow investors to employ short-selling strategies, especially Bithumb's leverage of up to 4 times, raising concerns about inadequate user protection measures. Currently, the Korean stock market's leveraged ETFs are limited to only 2 times.
After the authorities convened the meeting, Upbit stopped USDT lending services on the 28th, and Bithumb unified its lending services on the 29th, currently not accepting new applications due to quota exhaustion. Given the ongoing controversy, the financial authorities decided to establish a special working group with the industry to develop self-regulatory rules.
