South Korea stops the new lending of encryption and business guidelines star-news.press/wp

The best financial organizations in South Korea have ordered the exchange of encryption to suspend the lending of new digital assets, noting the risks of installation and highlighting the need for clear rules.

Financial Services Committee (FSC) He said On Tuesday, I sent messages to exchanges that require the suspension of the new encryption lending to complete the instructions. Current contracts, such as payment and maturity accessories, will be allowed.

On July 31, FSC and Financial Supervision Service (FSS) announced that it had formed a joint workplace to develop an organizational framework for encryption lending. The guidelines are expected to cover the limits of the leverage, the user’s eligibility, and the risk disclosure of virtual asset lending activities.

FSC said it would conduct the site inspections and take supervisory measures against the platforms that failed to comply.

Highlighting the forced references, the urgent need for clear rules

This step follows reports of large -scale user losses, including thousands of forced cells in the exchanging lending programs.

FSC said that one of the unknown stocks that were identified about 27,600 users in a month after the launch of the lending service in mid -June. The platform recorded about 1.5 trillion Korean Won ($ 1.1 billion) in size. Among these users, about 13 %, or 3635 people, have suffered from forced qualifiers as their encryption sites decreased.

FSC has also referred to two companies of Tether lending services, which led to an increase in the sale of an extraordinary size and decline in USDT prices. The agency said that continuous new lending operations without guarantees could increase the destruction of investor money.

Related to: South Korean banks plan plans to create Stoplkin by 2026

Crypto Linding is a gray area in South Korea

Since 2020, South Korea has laid the founding organizational basis for virtual asset service providers (VASPS).

This includes money laundering materials (AML) and the travel base under the revised law on reporting and the use of specific financial treatment information.

In 2023, the country’s virtual assets protection law entered into force, creating a legal basis for sanctions against unfair activities such as manipulation of the market and the diarrhea of user deposits.

Nevertheless, coding lending has been in a gray area, as it works without clear regulatory frameworks or a license system.

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