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Tom Lee

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In many countries, including South Korea, funeral homes operate a prepaid or mutual aid model where customers pay in advance for their own future funeral arrangements. They lock in costs and relieve their families of the financial burden later.&nbsp;
These advance payments create large pools of customer funds that the company holds and is expected to manage conservatively until they are needed.
For customers of the funeral service company Bumo Sarang, the assurance that their prepaid money still exists is now in question.&nbsp;
Bumo Sarang is a South Korean funeral mutual aid company that sells prepayment plans for funeral services, allowing customers to lock in costs in advance.
According to the <a href="https://www.ftc.go.kr/www/selectBizPpitRegWebView.do?pageUnit=10&amp;pageIndex=4&amp;searchCnd=all&amp;key=249&amp;bzmnSn=240" rel="noopener noreferrer nofollow">company's official registration</a>, the company has three co-CEOs, namely Bae Seok-do, Jeong Woo-seong, and Choi Gyu-seok.
The company is supervised by the Fair Trade Commission rather than financial regulators, despite holding large pools of customer prepaid funds.&nbsp;
Its name roughly translates to "love for parents" in Korean.
<a href="https://www.thestreet.com/crypto/explained/explained-what-is-a-crypto-etf-and-why-does-it-matter" rel="noopener noreferrer nofollow">Related: Explained: What is a crypto ETF?</a>
<h2 id="40-million-bet-gone-wrong">$40 million bet gone wrong</h2>
Bumo Sarang invested approximately $40 million of customer prepaid funds into leveraged cryptocurrency ETFs. Now, it is sitting on roughly 49.3 billion won ($32.7 million) in unrealized losses, according to its <a href="https://www.ftc.go.kr/www/selectBizPpitRegWebView.do?pageUnit=10&amp;pageIndex=4&amp;searchCnd=all&amp;key=249&amp;bzmnSn=240" rel="noopener noreferrer nofollow">2025 audit report</a>.
A crypto ETF is an exchange-traded fund that tracks the price of one or more cryptocurrencies. It allows investors to gain exposure to digital assets without directly buying or holding them.&nbsp;
Standard crypto ETFs, such as<a href="https://www.thestreet.com/crypto/markets/bloomberg-analyst-spots-rare-reversal-in-bitcoin-etf-flows" rel="noopener noreferrer nofollow"> spot Bitcoin ETFs,</a> move roughly in line with the underlying asset. Leveraged crypto ETFs are an entirely different beast. They use financial derivatives to multiply the daily returns of an underlying asset, typically by two or three times.&nbsp;
While that sounds appealing in a bull market, the mechanics of daily rebalancing mean that leveraged ETFs suffer from what is known as "volatility decay," a compounding effect where repeated up-and-down swings erode returns over time, even if the underlying asset ends up roughly where it started.
For Bumo Sarang, the vehicle of choice was the T-REX 2X Long BMNR Daily Target ETF (BMNU), a product that doubles the daily returns of BitMine Immersion Technologies (NYSE: BMNR).&nbsp;
Chaired by Wall Street legend Tom Lee, BitMine is a publicly traded Ethereum treasury company that accumulates ETH on its balance sheet. It recently reported <a href="https://www.thestreet.com/crypto/markets/wall-street-legends-firm-reports-3-8-billion-in-quarterly-loss" rel="noopener noreferrer nofollow">$3.8 billion</a> in quarterly losses.&nbsp;
Using a leveraged ETF means losses are amplified, so any decline in BitMine's stock hits Bumo Sarang's position twice as hard on any given trading day.
<h3 id="trending-on-thestreet-roundtable">Trending on TheStreet Roundtable:</h3>
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<h2 id="wider-concerns-about-an-unregulated-industry">Wider concerns about an unregulated industry</h2>
The losses have renewed scrutiny over South Korea's funeral mutual aid industry, which is overseen by the Fair Trade Commission.&nbsp;
Korea Economic Daily <a href="https://en.bloomingbit.io/feed/news/112390" rel="noopener noreferrer nofollow">reported </a>that around 43% of local funeral service providers already hold fewer assets than the value of customer advance payments, raising concerns about the industry's ability to repay customers in the event of mass cancellations.&nbsp;
Bumo Sarang's situation sharpens those concerns considerably.
TheStreet <a rel="noopener noreferrer nofollow">Roundtable</a> reached out to Bumo Sarang for a comment and has not received a response at the time of publishing.
<a href="https://www.thestreet.com/crypto/markets/tom-lee-sees-10000-ethereum-price-target-after-launching-bitmine-treasury-play" rel="noopener noreferrer nofollow">Related: Tom Lee sees $10,000 Ethereum price target after launching Bitmine treasury play</a>

Funeral company posts $33M in unrealized losses on crypto bet

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