South Korean funeral firm loses $33M of customer prepayments on leveraged crypto ETF

Bumo Sarang, a South Korean funeral mutual aid company, recorded 49.3 billion won ($33 million) in unrealized losses after an audit revealed where it was investing its customers’ prepayment funds. 

The money was put into a leveraged cryptocurrency ETF tied to Bitmine (NYSE: BMNR), where it crashed and lost over half of its value. An investigation launched into South Korean funeral mutual aid companies revealed that 43% of them hold fewer assets than given to them by customers. 

Bumo Sarang’s crypto gamble goes wrong 

South Korea’s funeral mutual aid model works on advance payments. Customers pay upfront to lock in the cost of future funeral services, accumulating pools of capital that companies are expected to hold conservatively. 

Bumo Sarang, whose name translates roughly to “love for parents,” and is the seventh-largest funeral service provider in South Korea, poured approximately $40 million (59.5 billion won) into a risky bet on crypto. The company invested in the T-REX 2X Long BMNR Daily Target ETF (BMNU), a product designed to double the daily price movement of Bitmine Immersion Technologies (NYSE: BMNR). 

Cryptopolitan previously reported that Bitmine is the world’s largest corporate holder of Ethereum, with 5.2 million ETH on its balance sheet valued at roughly $12.3 billion. Bitmine purchased over 100,000 ETH per week at its peak before recently slowing to 26,659 ETH in its latest buy.

By the end of 2025, Bumo Sarang’s investment book value had crashed to just $6.8 million (10.2 billion won), leaving the funeral company with a staggering 49.3 billion won in unrealized loss. 

Leveraged ETFs amplify gains and losses equally, so any given trading day, a decline in BMNR stock hits Bumo Sarang’s position at twice the magnitude. Due to the repeated price swings, the products suffer from extreme volatility and have had their value eroded over time, even when the underlying asset ends flat.

Bumo Sarang’s initial 59.5 billion won investment fell to a book value of just 10.2 billion won after market declines, producing the 49.3 billion won loss figure. A company representative called it a “short-term unrealized loss” and said it was within the company’s “financial buffer.”

What is the ‘zombie’ funeral crisis? 

An investigative review of 75 South Korean funeral mutual aid companies found that 32 of them, roughly 43%, hold total assets below the sum of their customer advance payments. That gap means these companies may not be able to honor their obligations if large numbers of customers cancel. Local media have described this as a “Zombie Sangjo” (zombie mutual aid) crisis.

South Korean funeral companies are supervised by the Fair Trade Commission rather than financial regulators, meaning they face no capital adequacy requirements and no solvency thresholds. 

Under current law, these companies only need to keep 50% of customer prepayments “safe.” The other half can be invested in almost anything, including leveraged crypto ETFs. Korea Economic Daily reported that this lack of oversight extends across a market worth an estimated 10 trillion won.

Investigators also flagged a pattern of related-party lending, where some funeral companies issued loans to major shareholders in amounts exceeding total customer payments.

As of May 2026, six legislative proposals are pending to restrict how these companies invest funds and to ban loans to major shareholders.

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