South Korea’s Financial Services Commission (FSC) has issued a directive, effective immediately, requiring all domestic crypto exchanges to halt lending services. This move comes amidst regulatory concerns about investor risks and market stability in the country’s digital asset landscape. The FSC cites a need for clarity on digital asset lending guidelines before allowing such products. 27,600 investors borrowed over $1.1 billion in just one month through loan programs offered by various exchanges. This trend led to forced liquidation of borrowers due to price volatility, and briefly impacted stablecoin prices like USDT. 27,600 investors borrowed 1.5 trillion won ($1.1 billion) in just one month of a single program. About 13% of borrowers faced forced liquidation due to price swings. The FSC emphasizes the need for strong oversight in this space while awaiting the implementation of a new regulatory framework for digital assets.