Binance's 50x Korean Stock Trades Expose Regulatory Blind Spot

Binance's derivatives offering up to 50x leverage on Korean stocks has raised concerns over investor protection and potential spillover risks for Korea's stock market. The world's largest cryptocurrency exchange launched SAMSUNGUSDT, SKHYNIXUSDT, and HYUNDAIUSDT this month, allowing traders to take leveraged positions on Samsung Electronics, SK hynix, and Hyundai Motor.

The contracts initially offered leverage of up to 20 times before Binance raised the cap on the Samsung Electronics and SK hynix products to 50 times following strong demand. On June 22, Binance listed KORUUSDT, a derivative linked to KORU, a US-listed ETF designed to deliver three times the daily return of the Kospi.

Four days later, it introduced a version offering leverage of up to 50 times. Combined with KORU's built-in 3x leverage, the product effectively gives traders exposure equivalent to as much as 150 times the daily movement of the Kospi.

The products are easily accessible to Korean investors. Users can purchase Tether with won through domestic cryptocurrency exchanges such as Upbit and Bithumb before transferring the tokens to Binance for trading.