Samsung Electronics and SK hynix leveraged investment '50x bet'... ultra-high-risk leveraged trading surges on overseas exchanges

[Financial News] As concerns grow over the volatility of 2x leveraged exchange-traded funds (ETFs) based on Samsung Electronics and SK hynix in the domestic stock market, overseas cryptocurrency exchanges have introduced investment products with leverage of up to 50 times.
According to The Korea Economic Daily on the 28th, Binance, the world's largest cryptocurrency exchange, launched a leveraged derivative product (KORUUSDT) earlier this month based on Samsung Electronics, SK hynix, and Hyundai Motor Company.
Binance initially offered leverage of up to 20 times, but as investor demand surged, it has now expanded the maximum leverage for its Samsung Electronics (SAMSUNGUSDT) and SK hynix (SKHYNIXUSDT) products to 50 times.
Domestic investors can also trade without major restrictions by buying the stablecoin Tether (USDT) on platforms such as Upbit or Bithumb, which allow won deposits and withdrawals, and then transferring it to Binance. The industry believes that a significant amount of domestic investor funds has also flowed in.
Even higher-risk products are being traded.
Binance also offers a futures product that applies leverage of up to 50 times to the KOSPI (Korea Composite Stock Price Index) 3x leveraged ETF (KORU), which is listed on the New York stock market. In theory, if the KOSPI rises 1%, investors could earn up to 150% in returns. But even a slight decline could wipe out the entire principal, making it an extremely high-risk structure.
Trading volume is also growing rapidly. From the 22nd to the 26th, trading value for KORUUSDT reached $754.4 million, or about 1.1586 trillion won, in just five days. As of the 26th, cumulative trading volume for SKHYNIXUSDT, which was listed earlier this month, had reached $6.4213 billion, or about 9.8618 trillion won, approaching 10 trillion won.
The problem is that these products are effectively outside the regulatory reach of financial authorities.
Ultra-high-risk leveraged products that cannot even be listed in Korea are freely traded on overseas cryptocurrency exchanges, but there are effectively no measures in place to regulate them directly or protect investors.
Industry officials are increasingly concerned not only about gaps in consumer protection, but also about the possibility that investment funds from the domestic stock market could flow out to overseas exchanges.
y27k@fnnews.com Seo Yoon-kyung Reporter