South Korea's financial regulators have issued guidelines for virtual asset lending services, prohibiting excessive leverage lending.

South Korea's financial regulators have issued their first guidelines for virtual asset lending services. Due to increased competition among exchanges and heightened investor risks, regulators have completely banned leveraged and cash lending, and set individual limits and fee caps to discourage short-selling-like practices. On the 5th, the Financial Services Commission (FSC) announced it would implement the self-regulatory "Virtual Asset Lending Guidelines," developed by the Financial Supervisory Service and DAXA. The new guidelines focus on three key areas: service scope restrictions, user protection, and market stability. The guidelines explicitly prohibit excessive leveraged lending and Korean won cash lending, require exchanges to use their own assets for services, and prohibit third-party entrusted or indirect lending models. To strengthen user protections, first-time users must complete DAXA's online education and aptitude test. Lending limits will be set between 30 million and 70 million won, depending on trading experience. Preemptive notification of forced liquidation risks is required, and margin calls are permitted. The annual fee rate cannot exceed 20%, and public disclosure of lending status and liquidation cases for each currency is mandatory. In terms of market stabilization measures, lending targets are limited to the top 20 assets by market capitalization or listed on three or more Korean won exchanges, excluding trading warning products and currencies suspected of abnormal transactions; and the establishment of an internal control mechanism is required to prevent market fluctuations caused by excessive concentration of specific currencies.