Prepaid funeral service companies in South Korea are facing scrutiny after investigations revealed significant losses linked to risky cryptocurrency-related investments. Bumo Sarang (Parents’ Love), the seventh-largest firm in the sector, invested approximately 59.5 billion won (around $40 million) of customer prepayments into a leveraged Ethereum-themed ETF, suffering an unrealized loss of about 49.3 billion won ($33 million) as of the end of last year.
The company used T-REX 2X Long BMNR Daily Target ETF, a product designed to deliver twice the daily return of Bitmine, an Ethereum-linked treasury company. After a sharp decline in the crypto market, the investment’s value dropped to just 10.2 billion won.
A 2025 audit report filed with the South Korea Fair Trade Commission revealed the losses, which remain unrealized on paper. Across the sector, 32 of the 75 prepaid funeral companies hold assets that fall short of customer prepayments. The sector is regulated as a “prepaid installment transaction” business rather than a financial institution, meaning firms are only required to hold 50% of prepayments as collateral and face no strict rules on risky asset investments or capital adequacy.
The case has raised concerns about customer fund safety and could prompt regulators to tighten oversight of how mutual aid firms manage long-term reserves.
