South Korea's Financial Services Commission sets new crypto lending regulations, with interest rate cap of 20%

According to Cointelegraph, the South Korean Financial Services Commission (FSC) announced a crypto lending rate cap of 20%, banning leveraged lending. Lending is limited to tokens with the top 20 market capitalization or tokens listed on at least three Korean won exchanges. The new regulations are introduced to strengthen supervision of cryptocurrency lending services and protect investors. Transactions require ensuring that first-time borrowers complete online training and suitability testing set by the Digital Assets Transaction Alliance (DAXA). During forced liquidation, users must notify in advance and allow capital to be increased to avoid liquidation. Transactions require the use of own capital to provide lending services, and indirect lending is prohibited through third-party cooperation or outsourcing. FSC chairman nominee Li Yian criticized cryptocurrency, saying its price fluctuates greatly and lacks monetary functions and intrinsic value. Despite this, cryptocurrencies are still rapidly gaining popularity in South Korea, especially among young people.