Financial Services Commission "Guidelines for 'Virtual Asset Lending' to be Released Next Month" [Crypto Briefing]

[Financial News] The financial authorities will release guidelines related to 'virtual asset lending services' as early as next month.
The Financial Services Commission and the Financial Supervisory Service announced on the 31st that they held the first meeting and launched a task force (TF) to prepare guidelines for virtual asset lending services with the Digital Asset Exchange Joint Consultative Body (DAXA) and five virtual asset exchanges at the Government Complex Seoul.
A Financial Services Commission official explained the background of the TF's promotion, saying, "Recently, virtual asset exchanges have been operating services that lend virtual assets to users with virtual assets or deposits as collateral, and related services are expected to continue to expand." However, the current Virtual Asset User Protection Act and others do not have a clear regulatory framework for virtual asset lending services." In other words, unlike the stock market, there is not only a lack of institutional devices for user protection, but virtual asset exchanges also find it difficult to provide lending services stably due to legal uncertainty.
Some services are providing excessive leverage to users, raising concerns that if the price of borrowed virtual assets fluctuates sharply contrary to initial expectations, users may suffer significant losses.
Therefore, the TF plans to comprehensively consider the regulatory status of major overseas countries, regulatory methods of related markets such as stocks, and the specificity of the domestic virtual asset market to prepare a basic regulatory framework for virtual asset lending services that the industry must commonly comply with.
In particular, to protect users, the TF plans to focus on discussing △whether leverage is allowed △suitability principles for users △scope of users eligible for services △range of lendable virtual assets △user education and risk notification △disclosure plans for lending status by virtual asset type.
A Financial Services Commission official said, "We also requested a review of services with significant user damage concerns, such as leverage provision to virtual asset exchanges, or services with legal risks such as monetary lending," and added, "Through the operation of the TF, we plan to prepare guidelines as early as August and promptly promote legislation on related regulations based on the content and operational progress of the guidelines in the future."


elikim@fnnews.com Kim Mi-hee Reporter