#cryptonews
The number of crypto-trading South Korean youths defaulting on loans from neobanks is “skyrocketing,” media outlets reported on October 20.
Media “analysis” claims this is “due to the large number of neobank accounts linked to” crypto exchange wallets.
The data shows that 4.05% of K Bank customers aged under 30 have defaulted on their loans from the bank. K Bank is famously the partner of the crypto exchange Upbit. The bank has recently seen a huge spike in accounts from younger crypto trading South Koreans.
The claims came in the wake of the release of data showing there has been an increase in loan defaults of in customers aged in their teens and twenties at K Bank.
Multiple South Korean media outlets, including Digital Daily, claimed that there had been a surge in bank defaults at other neobanks, too. These also include Kakao Bank, which partnered with the Coinone crypto exchange in August 2022.
And that in turn has set the bank on course for an IPO, due to be completed at the end of this month.
That represents a fiat value increase of approximately 484% compared to data from December 2021, Segye Ilbo reported.
Banks have been left out of pocket to the tune of about $288 million by young borrowers who have failed to repay their debts.
The data came from the Financial Supervisory Service after a freedom of information request from the lawmaker Kim Hyun-jung. Kim is a member of the National Assembly’s Political Affairs Committee.
At Toss Bank, a neobank that does not currently partner with a domestic crypto exchange, the rate was 1.75%. Financial sector “experts” told media outlets that “twentysomethings with Upbit-linked accounts at K-Bank” may have “borrowed money for cryptocurrency investment” and then “lost the ability to repay their loans.”
Around 2.1% of Kakao Bank customers aged 29 and below have defaulted on their own loans, the data showed.