Bithumb’s new rules slash maximum loan limits by 80% and halve leverage, following regulator scrutiny over high-risk crypto lending products.
South Korean exchange Bithumb tightened rules on its month-old crypto lending service, halving leverage and sharply reducing loan limits to address investor risk concerns.
On Monday, the exchange said it resumed its crypto lending service after suspending it on July 29 over “insufficient lending volume,” according to a report from the South Korean newspaper Kookmin Ilbo.
“After a comprehensive review of the entire service, some adjustments have been made to protect investors and improve service quality,” Bithumb reportedly said. It reduced the maximum leverage ratio from 4x to 2x and cut the maximum lending amount from 1 billion won ($726,000) to 200 million won ($145,000), an 80% drop.
The new borrowing cap applies even to investors with more than 100 billion won ($72 million) in cumulative trading volume over the past three years, per the report.
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South Korea forms task force for crypto lending
On July 31, South Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS) formed a task force with the Korea Institute of Finance and local exchanges to draft “Virtual Asset Lending Service Guidelines.”
The task force will include members from the FSC, FSS and the Digital Asset eXchange Alliance (DAXA), representing the country’s five largest exchanges. It will draw on international standards, stock market regulations and the specific needs of South Korea’s crypto market to design rules that address leverage limits, asset eligibility and risk transparency.
Authorities also asked exchanges to reassess high-risk or legally ambiguous services, particularly those involving excessive leverage or fiat-based loans.
Bithumb reportedly reviewed its service terms with regulators before resuming operations under the new limits.
Cointelegraph reached out to Bithumb for comment but had not received a response by publication.
Related: Bank of Korea to launch virtual asset committee to monitor crypto
Over a quarter of Koreans in their 20s–50s own crypto
More than one in four South Koreans aged 20 to 50 hold crypto, according to a report from the Hana Institute of Finance. On average, crypto accounts for 14% of their financial portfolios. The highest ownership rate was among people in their 40s at 31%, followed by those in their 30s and 50s.
As reported, South Korean retail investors are shifting from US Big Tech to crypto-linked stocks, with their share of the top 50 net-bought equities climbing from 8.5% in January to 36.5% in June before easing to 31.5% in July.
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