- Bithumb reduced maximum leverage and reduced loan caps by 80% after regulatory pressure.
- South Korea’s Financial Service Commission formed a specialized working group on July 31 to create extensive guidelines for Kryptor.
The Bithumb exchange in South Korea has drastically reduced its Cryptocurrency lending limits after it encountered a lot of regulatory review. The platform reduced maximum leverage by half to 2x and reduced the loan lid by 80%. The radical reforms are an indication of the increased state concerns about high -risk crypt lending products in the Korean market.
Regulatory degradation forces greater service review
Bithumb restarted their crypt lending service at Monday After stopping the service on July 29 due to the lack of lending volume problems. The exchange made extensive adjustments to protect investors and improving the quality of the service in general, which is stated by the company. The maximum lending limits were reduced to 200 million won compared to 1 billion won, an incredible 80% cut in the amount available credit.
Traders with more than 100 billion also won in a three -year trade history must handle these sharpened new loan fronts. The political turnaround is dramatic since July 31, the Financial Services Commission established in South Korea a specialized working group. This regulatory body consists of the financial supervisory service, the Korea Institute of Finance and the most important exchange representatives that cooperate.
The working group comes develop Complete guidelines for the virtual supply service based on international practice and the demands in the domestic market. These rules will cover certain crucial aspects, such as leverage, acceptable assets and mandatory requirements for risks from exchanges.
Government officials specifically asked exchanges to review high -risk services that involve too much leverage or difficult fiat -based loan products across the country. Bithumb is said to have contact with regulatory authorities before making such drastic changes in their operations and returns to lending services under close surveillance.
The regulatory answer comes when Cryptocurrency adoption over South Korea’s younger demographic groups remarkably. A new study of Hana The institute shows that more than a quarter of the South Koreans between 20 and 50 years actively invest in Cryptocurrencies. The average market penetration level is high as digital assets make up about 14% of their total financial portfolios.
The highest ownership is registered in the forties of 31% with those in the age groups that come close. Korean retail investors turn to crypto-connected shares instead of more conventional US technology investments, with crypto-related capital purchases that rise to 36.5% in June, up from 8.5% in January, before they narrow any.
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