South Korea Cracks Down: Crypto Exchanges Ordered to Stop Lending Services Immediately

South Korea’s financial watchdog just dropped the hammer—crypto lending services are officially on ice. No more yield plays, no more 'risk-free' leverage. Exchanges have until further notice to comply, leaving traders scrambling for alternatives.

Why the sudden move? Regulators are circling like hawks, calling these services 'unregulated shadow banking.' Never mind that traditional finance has been doing the same thing for decades—just with more paperwork and bailouts.

For now, the message is clear: innovate, but not too much. And maybe don’t remind anyone how banks get away with 100x worse. Happy trading—while it lasts.

South Korea’s Broader Crypto Push

This lending freeze comes as South Korea takes broader steps to reshape its crypto market. The FSC is preparing a roadmap to approve the country’s first spot Bitcoin ETFs by the end of 2025, fulfilling South Korean President Lee Jae Myung’s pledge to lift the ban on such products.

Moreover, under President Lee Jae Myung’s government, South Korea is exploring the creation of a stablecoin linked to the Korean won. The nation is also working on a new law to create the country’s first official rules for stablecoins. The Financial Services Commission (FSC) plans to submit the bill to the National Assembly in October.

Also Read: North Korea Linked to £17m Crypto Heist That Collapsed UK Firm