South Korean funeral company reports $33M loss on leveraged ether ETF bet

A South Korean funeral services company called Bumo Sarang has disclosed an unrealized loss of roughly 49.3 billion won, approximately $33 million, after plowing customer prepaid funds into a leveraged ETF linked to a crypto mining firm. The investment, originally worth 59.5 billion won, had cratered to just 10.2 billion won by the end of 2025.

What happened

Bumo Sarang, ranked as South Korea’s seventh-largest funeral service operator, invested 59.5 billion won into the T-REX 2X Long BMNR Daily Target ETF, which trades under the ticker BMNU. That ETF is designed to deliver twice the daily returns of BitMine Immersion Technologies, a company trading under the ticker BMNR that has exposure to Ethereum through its mining operations.

In plain English: the funeral company took money that customers had prepaid for future funeral services and used it to make a leveraged bet on a small crypto mining stock. A leveraged bet that lost roughly 83% of its value.

Company representatives characterized the damage as a “short-term unrealized loss due to global market volatility.”

Here’s the thing about 2x leveraged ETFs: they’re designed for daily rebalancing, not long-term holding. Even if the underlying asset eventually recovers, the mathematical mechanics of daily leverage mean that prolonged volatility can permanently erode value. This is a feature the product literally warns about in its prospectus.

Why prepaid funeral funds matter

Prepaid funeral funds are exactly what they sound like. Customers pay in advance for funeral services, trusting the company to hold and manage those funds responsibly until they’re needed. Using such deposits to chase amplified returns on a volatile crypto-adjacent equity product is a mismatch between the risk profile of the investment and the obligations attached to the money.

The leveraged ETF problem

The BMNU ETF is part of the T-REX family of leveraged products. The 2x daily target means the fund aims to double whatever BMNR stock does on any given day. If BMNR rises 5%, BMNU should rise roughly 10%. If BMNR drops 5%, BMNU drops roughly 10%.

The catch is compounding. Over multiple days of volatility, the math works against you even if the underlying stock ends up roughly flat. This phenomenon, known as volatility decay, makes leveraged ETFs particularly dangerous as long-term holdings.

What this means for investors

For anyone holding leveraged crypto ETFs, the lesson is straightforward but worth repeating. These products are built for short-term trading, not portfolio allocation. The 83% drawdown Bumo Sarang experienced isn’t an anomaly. It’s exactly what leveraged daily-reset products do during extended downturns in the underlying asset.