South Korea’s leading cryptocurrency exchange, Bithumb, has drastically scaled back its lending program after just a month of launch due to low participation and concerns over investor safety. Initially launched on July 4th, the service offered loans with four times leverage on ten popular cryptocurrencies including Bitcoin, Ethereum, Ripple, and Tether, allowing users to borrow using both cryptocurrency or Korean Won as collateral. However, Bithumb paused the service on June 29th and resumed after an internal review on July 8th but with stricter conditions. Leverage was reduced from 4x to 2x, while maximum loan amounts were slashed by 80%, from 1 billion won to 200 million won. This new limit even restricts borrowers who have traded over 100 billion won in the past three years from borrowing as much. Bithumb’s move comes after regulators raised alarms about the high-leverage risk associated with crypto lending, prompting collaboration between financial authorities and cryptocurrency exchanges to establish safer guidelines for lending services. These measures include setting clear leverage limits, defining eligible assets, and ensuring transparency in risk disclosure. Regulatory pressure has led Bithumb to review its service limits before restarting coin lending, while Upbit removed Tether from its lending program due to legal concerns. Industry experts anticipate the release of new virtual asset lending rules soon, likely including strict limits on leveraged trading similar to those implemented in stock markets. Meanwhile, South Korean investors are shifting away from Big Tech stocks towards crypto-related shares, particularly those tied to stablecoins. From January to April, monthly purchases of U.S. Big Tech stocks averaged $1.68 billion but dropped sharply to $260 million by July, while crypto stock purchases surged, making up 36.5% of the top 50 purchases in June. This shift is driven by the adoption of stablecoins and the impact of the recently introduced US GENIUS Act. Bithumb’s retreat from high-leverage lending emphasizes a need for safer practices in the crypto lending industry.