- Bumo Sarang, the seventh largest funeral home company in South Korea, stuffed 59.5 billion won of customer prepayments into a leveraged ETF on ETH, ending 2025 with a loss of $33 million
- The product was called T-REX 2X Long BMNR – a two-time daily leverage on shares of Bitmine, Tom Lee’s largest listed ETH-treasury company, whose price has fallen by 40% since the beginning of 2026
- The case exposed a systemic problem: 43% of 75 Korean funeral companies have assets less than customers’ prepayments, the local press calls it a “zombi-sangjo crisis”
- In Poland, the funeral industry does not collect such prepayments, but leveraged crypto-treasury stock ETFs are available to Polish investors through foreign brokers, without KNF supervision and without warning.
The story I’m about to tell sounds like a joke made up by someone who wants to ridicule the crypto market. A Korean funeral company called Bumo Sarang, which means “Parental Love” in Polish, took money from prepaid customers for its own funerals and put it into a leveraged ETF on the shares of a company that buys Ethereum. The loss was eight times greater than the company’s annual revenue. Customers who had been paying for years to have their funerals arranged did not know that their money was at stake for the double daily change in the BMNR price on the NYSE.
Sounds absurd. It’s absurd. And it’s true.
What happened and how much it cost
Bumo Sarang is the seventh largest funeral home company in South Korea. It operates in the mutual aid model, i.e. clients pay monthly or one-off sums towards the future organization of a funeral, and the company keeps this money for years, sometimes decades, before the service is performed. The 2025 audit report filed with the Korea Fair Competition Commission revealed that the company invested 59.5 billion won (approximately $40 million) in the T-REX 2X Long BMNR Daily Target ETF. The value of the position at the end of the year dropped to 10.2 billion won, or less than USD 7 million. Paper loss: 49.3 billion won, approximately USD 33 million.
To understand the scale, it is worth counting. The loss is eight times the company’s annual revenues. Translating into Polish terms: if a medium-sized Polish funeral home with an annual turnover of PLN 4 million spent PLN 32 million of clients’ money in one year, it would be the same proportion. But in Poland, such a funeral home would have no way to get PLN 32 million to play, because the Polish industry does not collect prepayments on such a scale.
How the instrument that destroyed them works
T-REX 2X Long BMNR Daily Target ETF, ticker BMNU, is a product managed by Tuttle Capital Management and REX Shares. Its goal is simple: to deliver twice the daily share price change of Bitmine Immersion Technologies (BMNR). Bitmine is a company led by well-known Wall Street analyst Tom Lee, which in less than a year has purchased over 5.2 million ETH, or over 4.3% of the entire Ethereum supply. Bitmine is to ETH what Saylor’s Strategy is to BTC, except Strategy has never been traded in a twice-leveraged retail ETF.
Leveraged ETFs reset daily. This means that their goal is to double the daily change, not the cumulative change over time. A side effect is the so-called volatility drag, i.e. erosion of value during a volatile market. If a stock falls 20% in one day and then rebounds by 25% the next day, it is at zero. Leveraging twice in the same sequence is a 40% decrease and a 50% increase, giving a cumulative loss of 10%. The greater the variability and the longer the horizon, the greater the erosion. Bumo Sarang held this position for several months during a period in which Bitmine has fallen by approximately 40% and ETH by approximately 28% since the beginning of 2026. Double leverage turned a 40% underlying decline into a disaster.
Importantly, this erosion cannot be recovered by “holding it until it rebounds”. A leveraged ETF does not return to its starting point even if the underlying asset returns. Bumo Sarang clients do not lose because crypto has fallen, they lose mainly because of the structure of the instrument itself.
A hole in the law that no one has closed
The Korea Fair Competition Commission, which oversees the funeral industry, allows mutual aid companies to invest half of customers’ down payments in any asset. It is not the financial regulator that sets these rules. There is no capital adequacy requirement, no solvency thresholds, and no list of prohibited instruments. There is only a 50% limit and the general phrase “any assets”.
Bumo Sarang complied with the regulations when he bought a leveraged ETF on the shares of a company that buys Ethereum. Three layers of distance from any traditional notion of “safe asset”, and all legal.
The scale of the problem is larger than one company. The Korea Economic Daily reviewed audits of 75 Korean mutual aid funeral companies and found that 32 of them, or about 43%, have assets less than their customers’ total downpayments. Local media are calling it the “sangjo zombie crisis,” from the word sangjo for this type of industry. This means that if a large number of customers wanted to withdraw their deposits at the same time, these companies would have nothing to pay back. There are now six bills before the Korean parliament to ban speculative investments and related loans in this industry.
And now the Polish angle that no one wants to say out loud
The reaction I see in Polish comments on this matter is roughly “it’s impossible for us.” Untruth. What is different here is the funeral industry model, which does not collect prepayments on such a scale. The rest of the mechanism works identically.
Leveraged crypto and crypto-treasury ETFs are available to Polish retail investors through foreign brokerage platforms. T-REX 2X Long BMNR is listed on the stock exchange in the United States, so any Polish investor with an account with a broker offering the American market can buy it with one click. The Polish Financial Supervision Authority has no jurisdiction over this product because it is an American ETF managed by an American company and listed on the American stock exchange. MiCA does not regulate derivatives on shares of crypto-treasury companies, MiCA regulates crypto-asset issuers and trading platforms themselves.
This means that a Polish retail investor can get an ad this morning “double exposure to ETH via BMNR, earn 2x faster”, buy BMNU units in five minutes, and there is not a single Polish regulator to warn him that volatility drag will eat up his capital even if the underlying asset remains stationary. The Bumo Sarang case is not exotic, it is a mirror.
What does this mean practically?
First, leveraged ETFs are not a substitute for holding crypto. Even if you believe that ETH will grow 2x in a year, a leveraged ETH ETF will not give you twice that growth, they will give you 1.3-1.5x at best, negative at worse. This is a day trading product, for opening and closing positions in the same session. Holding BMNU or similar products for months is a guaranteed erosion, which is only covered by a very strong upward trend (40%+ per year without major corrections).
Second, you never put other people’s money into leveraged ETFs. That Bumo Sarang did this is due to three things: management greed, a gap in oversight, and a lack of financial education in an industry that has historically invested in treasury bonds. If you manage other people’s money, a leveraged ETF on shares of a crypto-treasury company is the category of “products that explain to the supervisory committee in the morning, dismissal at noon.”
Third, the lack of a warning from the regulator does not mean that the product is safe. The Polish Financial Supervision Authority is not obliged to warn about American ETFs. It is your responsibility as an investor to understand what you are buying. The Bumo Sarang case shows what happens when someone fails to fulfill this obligation and has USD 40 million at their disposal.
Fourth, the problem of prepayments in the non-financial sector is something that Poland should watch closely. We have our own equivalents of the mutual aid industry, although on a different scale, in the form of some insurance models, private pension plans outside IKE/IKZE and structured deposits with exposure to crypto. MiCA does not answer the question of what happens to a client’s money when a non-financial company buys a crypto-derivative product in the US. This question has not been answered yet.
Bumo Sarang is not a story about Korea. This is a story about how easy it is today to waste customers’ money through instruments that look like an investment, but are a bet with a daily reset. The company’s name, “Parental Love”, sounds in this context like the worst-composed joke in history. For 43% of Korean funeral directors, the joke continues.
