South Korea Suspends Crypto Lending Services to Protect Users

Written by Ohris M. Greyoon, Blockchain & Crypto Expert

Source: Coinmarketcap

Updated: Aug 19 2025

South Korea's Regulatory Action: The Financial Services Commission (FSC) has ordered local cryptocurrency exchanges to suspend credit services to protect users and stabilize the market until new regulations are established.
Impact of Credit Services: Exchanges like Upbit and Bithumb had introduced credit services allowing users to borrow against their assets, resulting in significant borrowing but also high risks, with 13% of users facing losses due to forced liquidation.
Future Regulations: The FSC plans to create clear guidelines for leveraged cryptocurrency credit services to enhance user protection and reduce market uncertainty, while non-compliant exchanges will face inspections.
Broader Regulatory Changes: South Korea is moving towards more transparent regulations, including lifting restrictions on institutional investors and preparing for the introduction of spot cryptocurrency ETFs and a stablecoin market.

About the author

Ohris M. Greyoon

Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.

South Korea Suspends Crypto Lending Services to Protect Users

About the author

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