The South Korea Financial Services Commission warned investors that perpetual futures offered by offshore virtual asset platforms can carry leverage of 10 to 200 times and generally fall outside domestic investor protection rules. These products are not institutionally permitted in South Korea, and investors may face rapid forced liquidation, limited legal recourse and uncertainty over the safeguarding of assets held by offshore operators. Unlike conventional futures, perpetual futures have no maturity date, do not provide for delivery at a future date and trade continuously. A position linked 150 times to a South Korean stock index could be fully liquidated if the index moves about 0.66% against the investor. The commission will monitor products linked to South Korean markets and their domestic impact, refer suspected illegal domestic business by offshore platforms to investigative authorities, and ask major operators to avoid violations of South Korean law. It will separately consider whether and how similar products could be introduced domestically, taking account of market impact, investor protection and international discussions.
South Korea Financial Services Commission warns of 10 to 200 times leverage and protection gaps in offshore perpetual futures
The South Korea Financial Services Commission warned that offshore perpetual futures can use leverage of 10 to 200 times and are generally not covered by domestic investor protections. It will monitor products linked to South Korean markets and refer suspected illegal domestic business by offshore platforms to investigative authorities.