South Korean financial authorities strengthen supervision of overseas perpetual contracts, illegal promotion within the country may be referred to prosecutors.

BlockBeats news, October 16: South Korea's Financial Services Commission and Financial Supervisory Service issued an investor warning regarding perpetual contracts traded on offshore virtual asset platforms. Authorities stated they will strengthen monitoring of offshore platforms offering perpetual contracts linked to Korean stocks and stock indices; if illegal domestic operations such as soliciting Korean residents to open accounts or trade are confirmed, strict measures including filing complaints with investigative authorities will be taken, and major related offshore platform operators will be required to comply with Korean law.

South Korean authorities pointed out that such perpetual contracts have no expiration date and trade 24 hours a day, with some products offering leverage of 10x to 200x. Citing an example of a product linked to a Korean stock index with 150x leverage, they said a reverse index movement of about 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 Korean financial laws, making domestic dispute resolution and investor remedies difficult in cases of bankruptcy, business suspension, unilateral trading halts, or system failures, and the custody of client assets is also difficult for domestic regulators to verify. Authorities said they will carefully assess whether to introduce similar products domestically and the related regulatory framework.