South Korea Don Stop New Crypto Lending After Bithumb Liquidations
South Korea Financial Services Commission don pause new crypto lending services for small time after big big liquidation happen for local exchange Bithumb. For June, like 27,000 users use Bithumb lending platform, and about 13% people gatsu fwa liquidation because market no stable. Regulator yan talk say e no get enough protection for users and e fit spoil market, so e pause new lending till dem publish Virtual Asset Leasing Services Guide. Meanwhile, Galaxy Digital report say crypto-collateralized debt for centralized and decentralized platform don rise reach $44.25 billion, e increase 30% from last quarter. Traders dem suppose dey watch regulatory update and leverage indicators because this one show say government dey look crypto lending and market leverage well well. For short time, small leverage fit reduce liquidity and make bearish mood; for long time, better rule fit bring stability and make institutional people join.
Bearish
Di suspension of new crypto lending services for South Korea dey directly limit how market leverage fit be and e reduce liquidity, wey fit make the price of asset go down small for short term. This move dey show say regulator no sure and dem dey watch lending platforms well-well since Bithumb liquidations and the 30% increase for crypto-collateralized debt. Even though clearer rules and di Virtual Asset Leasing Services Guide wey dey come fit help stabilize tins for long term and make institutions dey put money inside, di immediate effect go be say market for crypto go dey bearish as traders dey adjust dia positions and dey reduce risk because lending don tight.