South Korean financial regulatory authorities issue virtual asset lending service guidelines, prohibiting excessive leverage lending

PANews reported on September 5 that according to Newsprime, South Korea's financial regulatory authorities issued the first virtual asset lending service guide. As exchange competition has intensified investors' risks have increased, regulators have completely banned leverage and cash lending, and set up personal limits and handling fee limits to block similar short selling. The Korea Financial Committee announced on the 5th that it will implement the self-regulatory "Virtual Asset Lending Business Guide" formulated by the Financial Supervision Institute and DAXA. The new guide focuses on three core points: service scope limitation, user protection and market stability. The guide clearly prohibits excessive leverage lending and Korean won cash lending. Transactions require use of their own assets to provide services, and third-party entrustment or indirect lending models are prohibited. In terms of strengthening user protection measures, first-time users must complete DAXA online education and adaptability tests, and set a loan limit of 30 million to 70 million won based on the differences in transaction experience; prior to the occurrence of a forced liquidation risk, you must inform in advance and allow additional margin; the annual fee rate shall not exceed 20%, and the current borrowing status and liquidation cases of various currencies must be forcibly announced. In terms of market stability measures, the lending targets are limited to assets with market value of the top 20 or listed on more than 3 won exchanges, and transaction warning varieties and suspected currencies for abnormal transactions are excluded; internal control mechanisms are required to prevent market fluctuations caused by excessive concentration of specific currencies.