Bithumb Exchange Slashes Crypto Lending Leverage Following Regulatory Pressure

Seoul-based cryptocurrency exchange Bithumb has drastically reduced leverage on its lending service just weeks after launch, yielding to regulatory demands. The platform initially offered 4x leverage on ten major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) when the service launched in early July.

The updated terms now limit leverage to 2x and cut maximum loan amounts from 1 billion won to 200 million won ($144,000), marking an 80% reduction. Even high-volume traders with over 100 billion won in historical trading activity must adhere to these stringent new limits.

South Korean financial regulators prompted this adjustment after June meetings with exchanges to establish safer lending practices. Authorities emphasized concerns about retail investors facing significant losses during market volatility when using high leverage with digital assets.