The governor of South Korea's central bank said leveraged crypto trading threatens the country's financial system, the Korea Herald reported.
- “An excessive level of leveraged cryptocurrency trading puts households at risk of financial damages considering the instability of [cryptocurrency],” Bank of Korea Gov. Lee Ju-yeol said Thursday.
- “We expect [the increasing amount of crypto trading] to have a negative impact on the financial system in any respect."
- Lee pledged to monitor the monetary transactions of Korea's financial institutions associated with leveraged crypto trading, suggesting new loans may be curtailed to prevent defaults that could have a knock-on effect on the country's banking system, according to the Korea Herald.
- Korea's central bank is already seeking the authority to monitor cryptocurrency transactions made through individuals' bank accounts.
- That measure could be brought in as early as September, which is also the deadline for crypto exchanges to register as virtual asset service providers, a requirement that would enable the state to determine the legality of their operations in order to crack down on money laundering and fraud.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.