South Korea’s exchange Bithumb tightened its regulations on crypto lending services that month earlier, cutting leverage by halving to address risk concerns from investors and significantly reducing loan restrictions.
A report by Korean newspaper Kookmin Ilbo said on Monday it resumed crypto loan services after it stopped on July 29th with “inadequate amount of loans.”
“After a comprehensive review of the entire service, some adjustments have been made to protect investors and improve the quality of the service,” Bithumb says. The maximum leverage ratio fell from four times to two times, while the maximum loan amount fell from 1 billion won ($726,000) to 200 million won ($145,000), down 80%.
The new borrowing cap will also apply to investors who have surpassed the cumulative trading volume of 100 billion wins ($72 million) over the past three years, according to the report.
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South Korea has formed a task force for crypto loans
On July 31, the South Korean Financial Services Commission (FSC) and Financial Supervisory Services (FSS) established the Korean Financial Research Institute and the Local Exchange Institute and the Task Force to draft the “Virtual Asset Loan Services Guidelines.”
The task force includes members of the FSC, FSS and the Digital Asset Exchange Alliance (DAXA) and represents the country’s five largest exchanges. It takes advantage of the international standards of the Korean crypto market, stock market regulations and specific needs for design rules that address leverage limitations, asset eligibility, and risk transparency.
The authorities also sought a replacement to be reevaluated for high-risk or legally ambiguous services, particularly services that include excessive leverage or FIAT-based loans.
Bithumb reportedly reviewed terms of service with regulators before resuming operations under the new restrictions.
Cointelegraph contacted Bithumb for comment but did not receive a response from the publishing.
Related: Bank of Korea establishes virtual assets committee to monitor crypto
More than a quarter of Koreans in their 20s to 50s
According to a report by the HANA Institute of Finance, more than one in four people aged 20 to 50 carry the code. On average, Crypto accounts for 14% of its financial portfolio. The highest ownership rates were among 31% of people in their 40s, followed by people in their 30s and 50s.
https://www.youtube.com/watch?v=hi5h_h3zjq8
As reported, Korean retail investors have shifted from crypto-linked stocks from major US engineers to crypto-linked stocks, which will ease to 31.5% in July after rising from 8.5% in January to 36.5% in June.
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