South Korean regulators monitor high-leverage offshore stock futures

South Korean financial authorities are monitoring the rise of offshore perpetual futures trading on global cryptocurrency platforms. These products, offered by exchanges such as MEXC and Bybit, allow for 24-hour trading of Korean stocks like SK Hynix, Samsung Electronics, and Hyundai Motor outside of domestic market hours.

Some of these offshore products offer extreme leverage, reaching up to 200x. This level of leverage means a price movement of only 0.66% in the opposite direction could trigger a forced liquidation. Because these trades occur on international platforms, they bypass domestic investor protections, including mandatory education, simulated trading, and deposit requirements.

The Financial Services Commission is investigating the impact of these offshore markets on the domestic stock market. While these derivatives do not directly dictate domestic prices, significant price swings in offshore markets during non-trading hours could influence investor sentiment and price formation when the Korean market reopens. The commission also plans to check if these foreign platforms are conducting illegal business operations within South Korea by targeting domestic investors through referral codes or solicitation.