Overview

• The FSC issued administrative guidance on Aug. 19 directing exchanges to halt the rollout of new lending products with immediate effect.
• Existing lending contracts may continue under current terms, with borrowers allowed to repay or extend their loans.
• Regulators cited data showing about 27,600 investors borrowed roughly ₩1.5 trillion in a month, with around 13% liquidated during price swings.
• Domestic platforms had offered aggressive terms, including loans up to 80% loan‑to‑value at Upbit and up to four‑times collateral at Bithumb, which fueled rapid uptake.
• Officials flagged unusual USDT selloffs that briefly distorted stablecoin prices on local venues and warned noncompliant exchanges of on‑site inspections as formal lending guidelines are drafted.