The move follows recent offerings by major domestic exchanges, such as Bithumb and Upbit, which introduced high-risk lending options allowing users to borrow significant amounts relative to their collateral.
The task force will include members from the FSC, FSS, and the Digital Asset eXchange Alliance (DAXA), a self-regulatory body composed of five leading South Korean exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax.
The primary goal of the group is to establish clear rules governing leveraged lending products, which have recently seen increased adoption without standardized investor safeguards.
As noted in YNA’s report, Bithumb has allowed users to borrow up to four times their deposited collateral, while Upbit provided loans amounting to 80% of users’ asset values.
According to the FSC, the goal is to create a structured approach that can serve as a foundation for broader digital asset legislation in the future.
The establishment of the lending task force aligns with South Korea’s wider efforts to strengthen oversight in the digital asset sector.
The team will collaborate with government agencies during the upcoming legislative process for cryptocurrencies. Global regulators have also been paying closer attention to crypto lending following high-profile collapses of platforms like Celsius and BlockFi in 2022, which left many investors facing significant losses.
South Korea’s proposed rules aim to prevent similar events by setting clearer boundaries on lending practices within the country’s growing digital asset market.
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