South Korean regulators have ordered a suspension of cryptocurrency lending services until new guidelines are established

ChainCatcher news, according to The Block, the South Korean Financial Services Commission (FSC) has ordered local digital asset exchanges to suspend cryptocurrency lending services until appropriate regulatory guidelines are established. The FSC stated that cryptocurrency lending services are currently in a legal gray area, which may lead to user losses.

Previously, exchanges such as Upbit and Bithumb had also launched services allowing users to borrow against Korean won or digital assets as collateral. The FSC will allow repayments and maturity extensions for existing lending contracts while conducting on-site inspections of exchanges that do not comply with administrative guidance. The FSC stated that it will quickly formulate relevant guidelines to protect users and provide a clear regulatory framework.