South Korean financial authorities express concerns about cryptocurrency exchanges' leveraged borrowing services'

According to Yonhap News Agency, the Financial Commission and Financial Supervisory Authority of South Korea summoned executives from five virtual asset exchanges on July 25th to express concerns about the cryptocurrency lending services recently launched by Upbit and Bithumb. They pointed out that there are legal disputes, insufficient user protection measures, and leveraged investment may also affect the stability of operators. Previously, Bithumb launched a service on the 4th that allows borrowing up to 4 times the amount of cryptocurrency with assets or Korean won collateral, supporting 10 types of cryptocurrencies; On the same day, Upbit launched a service targeting three currencies with a maximum lending limit of 80%. This type of service allows investors to use short selling strategies, especially Bithumb's leverage investment of up to 4 times, which has raised concerns about insufficient user protection measures. Currently, the highest leverage ETF in the South Korean stock market is only 2 times. After the authorities convened a meeting, Upbit suspended USDT lending services on the 28th, and Bithumb made unified adjustments to lending services on the 29th. Currently, new applications are not accepted due to the exhaustion of quota. Given the ongoing controversy, the financial authorities have decided to form a special working group with the industry to develop self regulatory rules.