Financial Services Commission "Upbit 'Tether Lending'... Suspended Due to Legal Issues" [Crypto Briefing]

[Financial News] A representative from the Financial Services Commission stated on the 30th, "The termination of Upbit's 'Tether Coin Lending' support was due to its own legal issues."
The 'Coin Lending' introduced by Upbit earlier this month is a service where you can set a collateral amount from a minimum of 100,000 won to a maximum of 50 million won, and borrow up to 80% of the collateral in virtual assets. In other words, there is a limit to the amount that can be borrowed, making leverage investment practically impossible. The repayment period is up to 30 days after application. During the service period, you can repay the entire or partial amount at any desired time, and if the usage period expires or the lending ratio reaches 92%, it is forcibly repaid. The lending ratio refers to the ratio of the set collateral to the current value (converted to won) of the borrowed virtual assets. This service is designed to respond to downturns in the virtual asset market, such as 'Crypto Winter'.
Initially, Upbit supported Bitcoin (BTC) in the Coin Lending service, and soon added XRP (Ripple) and Tether (USDT) as new assets. However, just three weeks into the service, Tether support was terminated, and only Bitcoin and XRP support will be maintained. On the 28th, Upbit announced through a general notice, "To improve product structure and strengthen asset-specific management standards, Tether Coin Lending support will end on the 26th of next month," adding, "Partial or full repayment of Tether can be freely conducted within the support period." Currently, new and additional applications are suspended.
In this regard, some in the industry argue that lending Tether, a 'digital dollar', and receiving fees could be considered a lending business amid discussions on the legalization of stablecoins.
Meanwhile, financial authorities plan to form a task force (TF) with the industry to establish self-regulation. This is because the service that allows borrowing virtual assets up to four times the collateral in won is practically close to leverage investment. Currently, leveraged exchange-traded funds (ETFs) listed on the domestic stock market are only allowed up to twice the assets held.

yimsh0214@fnnews.com Sanghyuk Lim, Mihee Kim Reporter