Bithumb Tightens Crypto Lending Rules Following Regulatory Pressure
South Korean crypto exchange Bithumb has updated its crypto lending service just one month after launching it, cutting leverage in half and lowering loan limits sharply. These changes aim to reduce risks for investors and improve the overall service quality.
The exchange resumed lending operations on Monday after pausing them on July 29 due to “insufficient lending volume,” according to local news outlet Kookmin Ilbo. Bithumb reduced the maximum leverage from 4x to 2x and dropped the maximum loan size from 1 billion won ($726,000) to 200 million won ($145,000), an 80% reduction.
Regulatory Pressure Shapes Lending Limits
The new borrowing limits apply even to highly active traders with over 100 billion won ($72 million) in trading volume over the last three years. These moves follow regulatory efforts by South Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS), which formed a task force in late July to create clear guidelines for crypto lending.
This task force includes officials from FSC, FSS, the Korea Institute of Finance, and major exchanges through the Digital Asset eXchange Alliance (DAXA). They are working to set rules on leverage caps, asset eligibility, and risk transparency that fit both global standards and South Korea’s unique market.
Crypto Popularity Grows in South Korea
Despite tighter lending rules, crypto remains popular in South Korea. A recent study by the Hana Institute of Finance shows over 25% of South Koreans aged 20 to 50 own cryptocurrency, making up roughly 14% of their financial portfolios. Ownership peaks at 31% in the 40s age group, followed by people in their 30s and 50s.
