South Korea orders exchanges to halt crypto lending services

South Korea’s financial regulator ordered crypto exchanges to halt new crypto lending services as thousands of users suffered forced liquidations.

South Korea’s top financial regulator ordered crypto exchanges to suspend new digital asset lending services, citing mounting risks and highlighting a need for clear rules. 

The Financial Services Commission (FSC) said on Tuesday that it sent letters to exchanges requesting the suspension of new crypto lending until it completes guidelines. Existing contracts, like repayments and maturity extensions, will be permitted. 

On July 31, the FSC and the Financial Supervisory Service (FSS) announced they had formed a joint task force to develop a regulatory framework for crypto lending. The guidelines are expected to cover leverage limits, user eligibility and risk disclosures for virtual asset lending activities.  

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