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- Nidhi Kolhapur
Nidhi Kolhapur
Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
- Reviewed by:
Zafar Naik - Aug 12, 2025 10:57 UTC
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Bithumb Cuts Crypto Lending Leverage Amid Investor Safety Concerns
Bithumb has cut crypto lending leverage from 4x to 2x and slashed loan limits by 80%
Korean authorities are pushing for stricter virtual asset lending rules to curb high-risk leverage
Retail investors in Korea are shifting from U.S. Big Tech stocks to crypto-related shares
Seoul’s top crypto platform, Bithumb, has sharply scaled back its coin-lending service only a month after introducing it.
On July 4, Bithumb launched its much-anticipated lending program, offering loans with 4x leverage on ten major cryptocurrencies, including Bitcoin, Ethereum, Ripple, and Tether. Borrowers could use either crypto or Korean won as collateral.
But the rollout didn’t last long.
Bithumb Cuts Leverage, Loan Limits
As per a report from Kookmin Ilbo, Bithumb paused the service on June 29 due to low lending volume. After a full internal review, it resumed on July 8 but with tighter conditions.
- Leverage was cut from 4x to 2x
- The maximum loan amount was reduced by 80%, from 1 billion won to just 200 million won
Now, even investors with over 100 billion won ($72 million) in trading volume over the past three years can only borrow up to 200 million won through Bithumb’s lending service.
Regulators Push for Safer Crypto Lending
Bithumb’s recent changes come after Korean regulators raised alarms about risky high leverage in crypto lending. On June 31st, financial authorities and crypto exchanges teamed up to create safer rules for lending. They aim to set clear leverage limits, define eligible assets, and ensure transparent risk disclosure.
They also warned that, with a lack of user understanding, high leverage could cause major losses if crypto prices fluctuated sharply.
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After talks with financial authorities, Bithumb decided to review and lower its service limits before restarting coin lending. Meanwhile, Upbit has removed Tether from its lending service due to legal concerns.
Industry insiders expect new virtual asset lending rules to be released soon, likely including strict limits on leveraged coin trading, similar to stock market regulations.
Investors Shift from Big Tech to Crypto Stocks
Alongside these changes, South Korean retail investors are shifting from U.S. Big Tech stocks to crypto-related shares, especially those tied to stablecoins. From January to April, monthly Big Tech buys averaged $1.68 billion but dropped sharply to $260 million by July.
Meanwhile, crypto stocks surged, making up 36.5% of the top 50 purchases in June. This shift is driven by growing stablecoin use and the impact of the recently introduced US GENIUS Act.
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Bithumb’s retreat from high-leverage lending highlights a push for safer crypto lending practices in the industry. Definitely one to watch.
FAQs
Bithumb cut leverage from 4x to 2x and sloan limits by 80% after Korean regulators pushed for safer practices amid concerns about risky high-leverage trading in volatile crypto markets.
Authorities are drafting new virtual asset lending regulations with strict leverage limits, clearer eligible assets, and better risk disclosure – similar to stock market safeguards.
Retail traders are shifting from Big Tech (down 85% since April) to crypto stocks (36.5% of top 50 buys), fueled by stablecoin growth and the US GENIUS Act’s impact.
Yes 
No 
