Bithumb Slashes Crypto Lending Leverage, Loan Limits
Key Takeaways
Leverage Cut in Half – Bithumb reduced its maximum crypto lending leverage from 4× to 2×.
Loan Caps Slashed by 80% – The borrowing limit dropped from ₩1 billion ($145K).
Regulatory-Driven Change – Moves follow South Korea’s push for stricter lending guidelines through the DAXA task force.
South Korea’s leading cryptocurrency exchange, Bithumb, has made sweeping changes to its crypto lending service in response to mounting regulatory scrutiny.
Overview
As of August 12 2025, the platform has halved its maximum leverage ratio from 4× to 2× and slashed its maximum loan limit by 80%, reducing the cap from 1 billion won ($726,000) to 200 million won ($145,000).
These changes were implemented following a temporary suspension of the lending service on July 29 2025, which was attributed to
“insufficient lending volume,”
according to the South Korean newspaper Kookmin Ilbo.
Bithumb reportedly said,
“After a comprehensive review of the entire service, some adjustments have been made to protect investors and improve service quality.”
Industry-Wide Coordination Under Regulatory Watch
The revisions reflect growing regulatory pressure in South Korea. On July 31 2025, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) launched a task force in collaboration with the Korea Institute of Finance and major local exchanges—collectively dubbed the Digital Asset eXchange Alliance (DAXA).
This task force is drafting guidelines for lending services, focusing on leverage limits, asset eligibility, and risk transparency. Cryptonews adds that the new cap applies universally, including to
“qualified investors”
who have amassed over 100 billion won ($72 million) in cumulative trading volume across three years.
This marks a clear regulatory directive: high-volume traders no longer enjoy special exemptions. Additionally, authorities have signalled a push to reassess high-risk or ambiguous lending services, including those offering leveraged or fiat-based loans, to better align with traditional financial safeguards.
Implications for the User and the Future of Crypto Lending
These changes are poised to reshape Bithumb’s lending dynamics. With leverage now capped at 2× and borrowing availability drastically limited, users—especially those pursuing leveraged strategies—will likely see reduced potential for outsized returns and lower exposure to liquidation cascades during downturns.
From Bithumb’s perspective, tighter limits may dampen several revenue streams tied to high-margin lending, potentially curbing overall liquidity on their platform. The exchange’s cooperation with regulators could foster long-term stability and investor trust.
For regulators, these moves serve as a benchmark for structured oversight. Bithumb’s adaptation signals growing maturity in the crypto lending sector—one that balances innovation with risk management. With over 25% of South Koreans aged 20–50 holding crypto assets (averaging 14% of their portfolios, particularly among those in their 40s at 31%), the stakes for precise regulation are high.
Looking ahead, the task force’s forthcoming guidelines are expected by the end of the month and will likely mirror frameworks used in traditional markets. These may extend to asset eligibility, margin standards, and more robust disclosure norms.
Bithumb’s swift move to halve leverage and drastically reduce borrowing limits underscores a pivotal moment in South Korea’s crypto regulation—one that favours investor protection over permissive growth. As the regulatory environment tightens, platforms will be challenged to innovate within clear, structured boundaries. For users, this presents both limitations and greater peace of mind in what has often been a highly volatile landscape.