S. Korean funeral firm posts $33M unrealized loss on crypto ETF

Bumo Sarang, South Korea’s seventh-largest funeral provider, recorded an unrealized $33 million loss after placing about ₩59.5 billion ($40 million) of customers’ prepaid funds into the T-REX 2X Long BMNR Daily Target ETF. The loss appears in the company’s 2025 audit filed with the Fair Trade Commission and reflects the position’s decline in value by the end of 2025.

The U.S.-listed ETF seeks twice the daily return of BitMine Immersion Technologies (BMNR). BitMine operates as an Ethereum treasury and holds millions of ether, so the ETF’s value moves with ether’s price. By the end of 2025 the holding’s book value had fallen to about ₩10.2 billion (roughly $6.8 million), producing the roughly $33 million unrealized shortfall. Daily leveraged products can also lose value through volatility decay in choppy markets, which compounded losses as ether declined during the year.

The audit highlights how prepaid funeral funds are regulated in South Korea. The sector is overseen by the Fair Trade Commission as a prepaid installment business rather than by financial regulators. Rules require firms to keep half of customer prepayments in reserve; the remaining half can be invested, including in securities. That framework allowed Bumo Sarang to allocate a large share of customer deposits to a high-risk leveraged crypto ETF.

A review of 75 providers found 43% held fewer assets than the prepayments they owed customers. Six bills currently pending in the National Assembly would ban speculative investments and related-party lending by prepaid funeral firms.

Analyst Bull Theory described the investment practice as illegal and added, “This should be illegal.” Consumer groups and some lawmakers have raised concerns about exposing customer deposits to crypto market swings.

In the audit, Bumo Sarang characterized the shortfall as a temporary market movement it can cover with its financial buffer. The company has not signaled an intention to unwind the position, leaving customer prepayments dependent on future performance of BitMine and ether. The disclosure prompted calls in Seoul for tighter rules and greater oversight of how prepaid funeral funds may be invested.