South Korean financial authorities to strengthen monitoring of offshore perpetual contracts; violators soliciting South Korean residents may be referred to prosecutors

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South Korea will strengthen monitoring of offshore perpetual-contract platforms; violators soliciting residents may be referred to prosecutors.

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【South Korean financial authorities tighten oversight of offshore perpetual contracts; violators soliciting domestically may be referred to prosecutors】

The Financial Services Commission and the Financial Supervisory Service of South Korea issued an investor alert on perpetual contracts traded on offshore virtual-asset platforms. The authorities stated that they would strengthen monitoring of offshore platforms offering perpetual contracts linked to South Korean stocks and stock indexes; if illegal domestic business activities such as soliciting South Korean residents to open accounts or trade are confirmed, they will take stringent measures, including filing complaints with investigative authorities, and require major relevant offshore platform operators to comply with South Korean law. South Korean authorities noted that such perpetual contracts have no expiration date, 24 around-the-clock trading, and leverage on some products can reach 10 x to 200 x, with products linked to South Korean stock indexes; 150 x leverage as an example, stating that an inverse index movement of approximately 0.66%could trigger forced liquidation. Such products are not permitted under South Korea’s domestic regulatory framework. Most offshore platforms are not subject to South Korean financial laws, making domestic dispute resolution and investor remedies difficult in the event of bankruptcy, business closure, unilateral suspension of trading, or system failures; domestic regulators also have difficulty confirming how customer assets are held. The authorities stated that they would carefully assess whether similar products should be introduced domestically and the related regulatory framework.

Key points

South Korea’s Financial Services Commission and Financial Supervisory Service issued an investor alert on perpetual contracts on offshore virtual-asset platforms.
South Korean authorities will strengthen monitoring of offshore perpetual-contract platforms offering contracts linked to South Korean stocks and stock indexes.
If illegal domestic business activities, such as soliciting South Korean residents to open accounts or trade, are discovered, the authorities will take measures including filing complaints with investigative authorities.
Leverage on some perpetual contracts can reach 10 x to 200 x; the article gives the example that, at 150 x leverage, an inverse index movement of approximately 0.66%could trigger forced liquidation.
Such products are not permitted under South Korea’s domestic regulatory framework.
If an offshore platform goes bankrupt, ceases operations, unilaterally suspends trading, or experiences a system failure, domestic dispute resolution and investor remedies are difficult.
South Korean authorities will assess whether similar products should be introduced domestically and the related regulatory framework.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

Perpetual contracts have no expiration date and can be traded around the clock, while some products use very high leverage. South Korean authorities warn that relevant offshore platforms may face investigation or complaints being filed against them if they illegally solicit or conduct business with South Korean residents.

Why it matters to readers

High leverage may cause forced liquidation after only a small adverse market movement; if an offshore platform experiences operational or system problems, investors may find it difficult to protect their rights in South Korea.

Beginners need to understand that perpetual contracts have no expiration date and may use high leverage, so both the risk of loss and the difficulty of protecting one’s rights may be relatively high.

Risks and unknowns

The evidence does not provide an official original announcement link from South Korea’s Financial Services Commission or Financial Supervisory Service.
The evidence does not specify which offshore platforms will be subject to action.
The evidence does not indicate whether a relevant regulatory framework will subsequently be formally established.
The actual custody arrangements for customer assets cannot be confirmed based solely on this evidence.

South Korean financial authorities to strengthen monitoring of offshore perpetual contracts; violators soliciting South Korean residents may be referred to prosecutors

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