South Korea’s financial regulators have planned to release official guidelines on Cryptocurrency Lending Services next month, which is trying to protect and protect investors amid growing concerns over leveraged crypto products.
Financial Services Commission (FSC) and Financial Supervisory Service (FSS) Announced According to the local news outlet Yonhap News Agency (YNA), the formation of a joint task force to develop a regulatory structure for crypto loan on Thursday. This step follows the new lending services launched by South Korean Exchange Upbit and Bithamb.
According to YNA, Bithumb allowed users to borrow up to four times their collateral, while upbit offered loans up to 80% of users’ assets value.
Task Force seems to be a reaction to lack of clear safety measures for investors, rapidly increases the alarm at potential damage due to market rashes.
South Korea Crypto inspects on lending
The task force will allegedly include representatives of FSC, FSS and Digital Asset Exchange Alliance. DAXA is a self-controlled organization formed by five major crypto exchanges in South Korea, including the Apbit, Bithamb, Coinone, Corebit and Gopax.
The task force will consider international rules, traditional stock market regulations and the complexities of the local crypto market to create a crypto lending guidelines.
These guidelines are expected to cover the leverage limit, user and asset eligibility, risk revelations and transparency requirements for debt-related digital asset activities.
Officials also asked the exchanges to review high-risk and legally unclear services, such as excessive leverage or fiat-based lending services.
The new rules are expected to form a basis for future crypto laws and reflect the government’s widespread push to increase accountability in digital asset space.
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Korea’s bank to launch virtual asset committee
Establishment of a Leise Task Force from South Korean Central Bank follows a step to convert its current Central Bank Digital Currency (CBDC) Research and Development Teams into a virtual asset team that covers a comprehensive mandate.
Bank of Korea said that the virtual asset team will also be tasked to respond to the discussion on Stabecrim and other crypto assets. This will work with the government during the legislative process.
The formation of the committee was announced as South Korean banks grew after making stabeloin-related tricks in shares.
In June, Google Finance Data increased stabelcoin trademarks from 10% to 19% after entering stabelcoin trademarks to companies like Kakao Bank, Kukmin Bank and Korea.
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