South Korean exchange adopts stricter borrowing rules, cutting leverage and loan caps to address investor risk concerns.
South Korea’s Bithumb, one of the nation’s largest digital asset exchanges, has introduced significant changes to its crypto lending service, aiming to limit investor exposure and align with emerging regulatory expectations. The adjustments follow increased scrutiny of high-risk lending practices in the virtual asset market.
In its latest update, Bithumb reduced maximum leverage from four times to two times and lowered the upper borrowing limit by 80% — from ₩1 billion (about $726,000) to ₩200 million (around $145,000). The cap now applies even to high-volume traders with more than ₩100 billion in cumulative transactions over the past three years.
A spokesperson for a Seoul-based fintech advisory group commented, “Leverage in crypto markets has always been a double-edged sword. These changes reflect a growing consensus that excessive borrowing can magnify systemic risk.”
The policy revision comes as South Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS) form a joint task force to design new Virtual Asset Lending Service Guidelines. The group — which includes members from the Digital Asset eXchange Alliance (DAXA) — is expected to set clear standards for leverage, asset eligibility, and transparency.
According to a financial policy analyst in Seoul, “Authorities are taking cues from both international best practices and domestic market realities. Exchanges are being encouraged to pre-emptively address vulnerabilities before they trigger market instability.”
Growing Retail Crypto Participation
Recent research shows over one in four South Koreans aged 20–50 own digital assets, with crypto averaging 14% of their investment portfolios. Ownership is highest among those in their 40s, at 31%, followed by individuals in their 30s and 50s.
Market observers note that this broad retail participation has fueled demand for lending products but also heightened concerns about the potential fallout of risky borrowing.
Bithumb’s move signals a broader trend in Asia’s crypto markets, where exchanges are tightening lending policies to balance growth with investor safety.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.