South Korea Clamps Down on Crypto Lending—Is This the End of Risky DeFi Gambles?

Seoul slams the brakes on crypto-backed loans as regulators scramble to shield retail investors from volatile markets. No more playing with borrowed fire—for now.

Why the crackdown? South Korea's Financial Services Commission (FSA) won't let another Luna collapse happen on its watch. Anonymous FSA insider whispers: 'We'd rather be accused of overreach than negligence.'

The fine print: Zero exceptions for decentralized lending platforms. Even CeFi giants must now justify their risk models. One exec grumbles about 'innovation-stifling bureaucracy'—right before adjusting his compliance spreadsheet.

Silver lining? Forced deleveraging might ironically strengthen Korea's crypto ecosystem. Fewer margin calls mean fewer panic sellers—unless you're betting against common sense.

Final thought: When traditional finance finally builds its DeFi killer app, remember—they learned from crypto's mistakes while writing the rules against them. How's that for regulatory arbitrage?

South Korea’s Financial Services Commission has ordered local crypto exchanges to halt all lending services until official guidelines are introduced. The move follows concerns that 13% of borrowers have been pushed into liquidation due to unclear regulations. Current contracts can be repaid or extended, but no new loans are allowed. Exchanges that fail to comply will face on-site inspections by the authorities.