[Bitcoin Now] "Implementation of Virtual Asset Lending Service Guidelines...Clarifying the Scope of Lending"

Implemented as DAXA Self-Regulation
"Legislation to Be Pursued Based on Operational Outcomes"

Financial authorities are implementing voluntary regulatory guidelines for "virtual asset lending services" offered by cryptocurrency exchanges. Leverage services, which pose significant risks of user losses, as well as monetary lending services that may violate the Lending Business Act, will be restricted.

The Financial Services Commission and the Financial Supervisory Service announced that, starting September 5, 2025, the guidelines for virtual asset lending services will be enforced in the form of self-regulation by the Digital Asset eXchange Alliance (DAXA).

Previously, some exchanges offered leverage-type services that allowed users to borrow virtual assets in excess of their collateral, or provided monetary loans with repayment in Korean won. However, as certain exchanges provided leverage-based virtual asset lending services, concerns over potential user losses increased. In response, the financial authorities requested a temporary suspension of related services through administrative guidance in August, and the Financial Supervisory Service conducted on-site inspections.

The new guidelines are structured around three pillars: clarification of the scope of lending services, user protection, and market stability.

First, leverage services that pose significant risks of user losses and monetary lending services that may violate the Lending Business Act are restricted when lending virtual assets. In addition, the use of the operator's own assets will be the principle when running virtual asset lending services. To prevent regulatory circumvention, indirect forms of lending services through cooperation or outsourcing with third parties are also restricted.

In terms of user protection, new users are required to complete online training and a qualification test administered by DAXA. Referring to short-selling regulations in the stock market, individual lending limits will be set in stages at 30 million won and 70 million won. There is also a mandatory obligation to provide prior notice in the event of potential forced liquidation. If users provide additional collateral to prevent forced liquidation, operators must allow this within the individual lending limits.

The service fee for lending must not exceed the maximum annual interest rate of 20% set by other credit provision laws. There is also a disclosure obligation for key matters such as the fee structure, lending status by virtual asset type, and forced liquidation status.

To ensure market stability, the assets eligible for lending are limited to those ranked in the top 20 by market capitalization or those traded on at least three domestic won-based exchanges. Assets under caution or suspected of abnormal trading are restricted from being used for lending or as collateral. Operators are also required to establish internal controls to manage market volatility and prevent excessive price fluctuations due to concentrated lending demand for specific virtual assets.

Based on these guidelines, the financial authorities plan to pursue future legislation.