On July 4, Korea’s two largest digital asset exchanges, Upbit and Bithumb, both launched crypto lending services, sparking renewed interest in whether leveraged investment in digital assets may return to the domestic market.

Upbit’s “Coin Borrowing” service allows users to set a collateral amount (KRW 100,000 to KRW 50 million) and borrow cryptocurrencies for trading and withdrawal. Bithumb, via a third-party provider Block to Real, launched its own lending service that enables users to borrow up to four times their crypto holdings.

These services are gaining attention as they offer investors a “leverage effect” similar to margin trading or securities-based credit transactions, where borrowed assets are used to amplify investment returns. Given Korea’s past controversy over margin trading in 2017, legal clarity surrounding these services is a key focus.

On this issue, Ohhoon Kwon, Managing Attorney at CHA&KWON, stated:

“Crypto lending services may offer a leverage effect, but they are different from derivatives trading in traditional financial markets.
In stock markets, investors pay fees for derivative contracts, while crypto lending services only charge service fees.
Therefore, there are no legal issues under the current framework.”

Meanwhile, the Digital Asset Basic Act, recently proposed by Rep. Min Byung-deok, includes provisions to permit credit offerings by crypto exchanges, which may pave the way for leveraged crypto investments under law once the bill passes.