Korean funeral service providers suffer a loss of 59.5 billion won by using customers' coffins as collateral for Ethereum leveraged ETFs, revealing that 43% of companies are insolvent.

South Korea's 7th largest funeral mutual aid provider, "Parents Love" (부모사랑), has prepaid client funds totaling 59.5 billion won (approximately $43.1 million USD), gambling heavily on tracking BitMine's daily 2x leveraged ETF, which resulted in a paper loss of up to 49.3 billion won (about $33 million USD) by the end of 2025.
(Background: Trump’s tariff war hits DeFi itself — WLFI heavily invests in ETH, LINK, ENA… unrealized losses exceeding $50 million USD)
(Additional context: Current state of the clone ETF craze: a summary of crypto ETF applications since 2025)

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• 43% of providers are insolvent, customers may lose all upon cancellation
• Major shareholders misappropriating funds, subsidiaries borrowing
• Systemic loopholes: Who will protect "coffin money"?

Customers entrust their coffin money to providers, only to receive an empty bill!? According to Korean media reports, South Korea's 7th largest funeral mutual aid provider, "Parents Love" (부모사랑), in 2024, invested 59.5 billion won (about $43.1 million USD) of prepaid client funds into T-REX 2X Long BMNR Daily Target ETF (ticker: BMNU), a leveraged ETF managed by Tuttle Capital Management that tracks BitMine (BMNR) with 200% daily returns.

As a result, by the end of 2025, the book value of this fund had shrunk to only 10.2 billion won, with a paper loss of 49.3 billion won (about $33 million USD), shrinking over 80%.

BitMine started as a Bitcoin mining company, but in recent years has undergone a complete restructuring, prioritizing "Ethereum first," and is currently the world's largest publicly listed Ethereum (ETH) holder, but its stock price has fallen about 40% so far in 2026; Ethereum's price has also dropped approximately 35% during the same period, currently trading around $2,120.

Because leveraged ETFs further amplify losses in volatile markets, the erosion of principal far exceeds linear calculations. In response to external doubts, "Parents Love" PR stated: "This is just a short-term unrealized loss caused by global market fluctuations, within the company's financial buffer capacity."

However, investigations by Korea Economic Daily reveal that this is far from an isolated case.

43% of providers are insolvent, customers may lose all upon cancellation

Korea Economic Daily conducted a comprehensive review of the 2025 audit reports of 75 funeral prepaid providers nationwide, with shocking results: 32 of them (42.7%) have total assets below the amount of prepaid funds that should legally be refunded to customers.

In other words, if all customers simultaneously request cancellations, these companies will be unable to refund in full.

The core issue lies in the regulatory framework's fundamental gaps. Korean funeral prepaid providers are legally classified as "advance payment installment providers," overseen by the Fair Trade Commission, not financial regulators. The only current regulation requires providers to retain 50% of prepaid funds; the remaining funds can almost freely be invested in any assets, including leveraged crypto ETFs.

In contrast, financial institutions like insurance companies are subject to strict regulations such as "solvency ratios," but funeral providers employing the same fund management model are not.

Major shareholders misappropriating funds, subsidiaries borrowing

In fact, "Parents Love" is not an isolated case. Investigations by Korea Economic Daily reveal multiple cases of improper use of prepaid funds:

• The third-largest prepaid provider nationwide, "Sono Station" (prepaid balance of 1.4531 trillion won), lent out 50 billion won to its subsidiary in 2024 to acquire shares of the low-cost airline T’way Airlines.
• Small and medium providers like "Hanyang Mutual" (prepaid funds of 570 million won) loaned 2.2 billion won to their company representatives; "Jeju Sunrise Mutual" (prepaid funds of 450 million won) lent 1.6 billion won to major shareholders.
• The most severe case, "Daerou Welfare Business Group," has prepaid funds of 70.6 billion won, but total assets of only 40.7 billion won, clearly insolvent. In March this year, some customers requested cancellations but did not receive refunds, with unpaid amounts totaling 130 million won.

Systemic Loopholes: Who Will Protect "Coffin Money"?

The business model of Korea's funeral mutual aid industry involves customers paying funeral expenses in advance in exchange for future funeral services, with this money colloquially called "coffin money," representing the last safeguard families leave during their most vulnerable moments.

However, current regulations allow providers to invest these trust funds into high-risk leveraged assets, lacking capital adequacy regulations comparable to insurance companies. Whether the industry can complete regulatory strengthening before the next market turbulence is an unavoidable challenge for authorities.