The South Korean financial regulatory agency reminds virtual asset exchanges of the risks of leveraged investments.

Gate News bot message, on July 25, the South Korean Financial Services Commission and the Financial Supervisory Service convened a meeting with executives from the five major virtual asset exchanges, focusing on the cryptocurrency lending services recently launched by Upbit and Bithumb. The regulatory bodies expressed concerns about potential legal disputes regarding these services, inadequate user protection, and the impact on the operators' resilience.

Bithumb and Upbit launched crypto assets lending services on the 4th, allowing investors to engage in high-leverage investments and short-selling operations. This has raised the alert of regulatory agencies, especially considering that the maximum leverage for ETFs in the Korean stock market is currently only 2 times.

After the meeting, Upbit and Bithumb successively adjusted their lending services. In light of the ongoing disputes, financial authorities decided to jointly establish a special working group with the industry to formulate self-regulatory rules, according to Yonhap News.