South Korean funeral service providers lost 59.5 billion KRW after betting client funds on leveraged ETH ETFs, revealing that 43% of firms are now insolvent.

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Bumo Sarang, the 7th largest funeral mutual aid provider in South Korea, gambled 59.5 billion KRW (approximately 43.1 million USD) of customer prepayments on a leveraged ETF tracking 2x daily returns of BitMine, resulting in a paper loss of 49.3 billion KRW (approximately 33 million USD) by the end of 2025. (Context: Trump's tariff war hits DeFi; WLFI heavily invested in ETH, LINK, ENA... floating losses exceed 50 million USD) (Background: The current state of the altcoin ETF craze: A list of crypto ETF applications in 2025) According to reports, South Korea's 7th largest funeral mutual aid provider, Bumo Sarang, invested 59.5 billion KRW (approximately 43.1 million USD) of customer prepayments in 2024 into the T-REX 2X Long BMNR Daily Target ETF (Ticker: BMNU), a leveraged ETF managed by Tuttle Capital Management that tracks 200% of the daily returns of the mining company BitMine (BMNR). Customers entrusted their "coffin money" to the company, only to receive a statement of losses in return. According to Korean media, as of the end of 2025, the book value of these funds had dwindled to just 10.2 billion KRW, representing a paper loss of 49.3 billion KRW (approximately 33 million USD), a shrinkage of over 80%. BitMine started in Bitcoin mining but has undergone a comprehensive business restructuring in recent years, prioritizing "Ethereum-first." It is currently the world's largest publicly traded holder of Ethereum (ETH), but its stock price has fallen by approximately 40% since the start of 2026. Ethereum has seen a similar decline of about 35% in the same period, currently trading near 2,120 USD. Because leveraged ETFs further amplify losses in volatile markets, the erosion of principal has far exceeded linear calculations. Facing external criticism, Bumo Sarang's public relations department responded: "This is merely a short-term unrealized loss caused by global market volatility, and it remains within the company's financial buffer capacity." However, the investigation by The Korea Economic Daily reveals that this is far from an isolated case. A comprehensive survey of the 2025 audit reports of 75 funeral prepayment providers nationwide by The Korea Economic Daily yielded shocking results: 32 of these companies (42.7%) have total assets lower than the total amount of prepayments legally required to be refunded to customers. In other words, if all customers were to request contract terminations simultaneously, these companies would be unable to provide full refunds. The problem lies in a fundamental gap in the regulatory framework. South Korean funeral prepayment providers are legally classified as "pre-payment installment businesses" and are under the jurisdiction of the Fair Trade Commission, rather than financial regulatory authorities. The only restriction under current regulations is that companies must retain 50% of the prepayments; the remaining funds can be invested almost freely in any asset, including leveraged crypto ETFs. In contrast, financial institutions such as insurance companies are bound by strict regulations like "solvency ratios," which do not apply to the funeral industry despite their use of similar fund management models. In fact, Bumo Sarang is not an isolated case. The Korea Economic Daily investigation exposed multiple instances of the improper use of prepayment funds: - Sono Station, the 3rd largest provider by prepayment scale (prepayment balance of 1.4531 trillion KRW), lent 50 billion KRW to a subsidiary in 2024 to acquire shares in the low-cost carrier T’way Air. - Small and medium-sized providers like Hanyang Mutual Aid (prepayments of 570 million KRW) lent 2.2 billion KRW to the company representative; Jeju Sunrise Mutual Aid (prepayments of 450 million KRW) lent 1.6 billion KRW to a major shareholder. - The most severe case, Daero Welfare Business Group, holds 70.6 billion KRW in prepayments but has total assets of only 40.7 billion KRW, clearly indicating insolvency. As of March this year, customers who applied for contract terminations have not received refunds, with cumulative unpaid amounts reaching 130 million KRW. The business model of the South Korean funeral mutual aid industry involves customers paying funeral expenses in advance in exchange for future funeral service guarantees. This money, commonly known as "coffin money," is the final safeguard left by families during their most vulnerable moments. However, current regulations allow companies to invest these trust funds

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