Yonhap cites South Korea's foreign ministry

Yonhap cites South Korea's foreign ministry

The Financial Services Commission (FSC) of South Korea has introduced new guidelines aimed at regulating credit services offered by centralized cryptocurrency exchanges. Effective from September 5, the regulation caps the interest rates for crypto loans at 20% and prohibits leveraged loans that surpass collateral value. By introducing these guidelines, the FSC intends to curb risky financial practices in crypto markets [1].

The new rules are part of an ongoing effort to align crypto exchanges with broader financial regulations. The FSC's move comes amidst growing concerns over the volatility and risk associated with cryptocurrencies. The regulation aims to protect both lenders and borrowers by setting clear limits on interest rates and preventing over-leveraging.

This regulatory push is part of a broader trend in South Korea to tighten controls over the financial sector. In recent months, the country has seen a series of scandals and investigations involving major financial institutions. The FSC's latest guidelines are intended to enhance the stability and integrity of the financial system, particularly in the rapidly evolving field of cryptocurrencies.

The introduction of these new rules is likely to have significant implications for the crypto lending market in South Korea. While some may see it as a step towards greater regulation and stability, others could view it as a hindrance to innovation and growth. Only time will tell how the market adapts to these new guidelines.

References:
[1] https://en.coin-turk.com/south-korea-enforces-strict-controls-on-crypto-lending-services/
[2] https://en.yna.co.kr/view/AEN20250905005800315