South Korea’s Financial Services Commission (FSC) implements new rules for crypto lending, capping interest at 20% and prohibiting leveraged lending. Restrictions apply to top 20 tokens by market cap or those listed on three won-based exchanges, following late July reports of impending guidelines to protect investors from leveraged lending services. Exchanges must ensure first-time borrowers complete online training and suitability tests set by the Digital Asset eXchange Alliance (DAXA).
Forced liquidations must be notified in advance, capital additions to avoid liquidation allowed, and exchanges must use their capital for lending services. Indirect lending through third parties is banned to prevent regulatory evasion. The FSC nominee criticizes cryptocurrency, noting its price volatility, lack of monetary function, and intrinsic value. South Korea’s central bank is expected to increase scrutiny with a virtual asset committee monitoring the crypto market.
Wealthy families and family offices in Asia are increasing cryptocurrency allocations, with plans to allocate about 5% of portfolios to the asset class. South Korea has over 16 million crypto exchange users, over 30% of the total population, with some attributing this surge to financially desperate youth seeking easy money rather than embracing the technology. South Korean crypto adoption is seen as a consequence of financial desperation among the younger generation.
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2. Ethereum also reaches new record highs above $2,000, buoyed by increased interest in decentralized finance (DeFi) applications and the upcoming network upgrade known as Ethereum 2.0. The second-largest cryptocurrency by market capitalization continues to gain traction among investors.
3. NFTs (non-fungible tokens) are experiencing a surge in popularity, with digital artworks and collectibles selling for millions of dollars. The market for NFTs is expanding rapidly, attracting artists, musicians, and celebrities who see the potential for monetizing their creations through blockchain technology.
4. Tesla announces that customers can now purchase vehicles using Bitcoin, making it the first major car manufacturer to accept the cryptocurrency as a form of payment. CEO Elon Musk’s support for Bitcoin has contributed to its mainstream adoption and integration into traditional industries.: South Korea Bans Leveraged Crypto Lending, Caps Rates at 20%