South Korean critics have equated the crypto exchange Binance’s move to offer leveraged derivatives with up to 50x leverage on blue-chip KOSPI stocks such as Samsung Electronics, Hyundai Motor, and SK Hynix with gambling.
Binance has also begun offering USDT-powered products that pay traders 150% profits if the KOSPI index rises by a single percentage point on a specified day.
If the KOSPI index drops 0.66% against the trader’s prediction, however, the Binance platform liquidates its position.
But regulators are concerned that no special investment restrictions prevent South Koreans from making these trades.
Anyone with a South Korean won deposit and withdrawal account can purchase USDT coins on domestic virtual asset exchanges such as Upbit and Bithumb, wrote the South Korean newspaper Chosun Ilbo.
They can then send their USDT to Binance to execute their leveraged trades, the newspaper added.
KOSPI Gambling Must End, Say Critics
Scores of unnamed experts and industry figures likened Binance’s offerings to “gambling products,” in newspapers like the Hankyoreh.
Some other experts called the Binance products “speculative betting” tools.
Lee Chan-jin, the Governor of the Financial Supervisory Service, South Korea’s top financial regulator, has taken aim at single-stock leveraged investment products in recent weeks.
The FSS chief likened investing in such products to gambling.
“Just as the person taking a cut in a gambling den makes the most money, I am deeply concerned that the players make small gains while only the system operating the market makes [big] money,” Lee added.
Lee said he regretted the FSS’ previous decisions to allow 2x leveraged trades on single chipmaker stock exchange-traded funds (ETFs).
“We should have stopped it,” Lee said.
The FSS approved these funds at the end of 2025, hoping it would bring more overseas investors to the South Korean market.
The result, said one financial analyst, was a “leveraged casino,” as the market immediately overheated.
The Binance products go far beyond that.
“I find myself wondering where this will all end,” Cho Do-hyeon, a Seoul-based office worker and part-time stock investor, told CasinoBeats. “Any sort of investment in South Korean tech stocks already feels like gambling at the moment. But leveraged crypto-powered KOSPI trades? That seems to go to a whole new level.”
No Safeguards
“In South Korea, investors must complete mandatory training before trading even 2x leveraged ETFs. No comparable safeguards exist on Binance,” an unnamed domestic crypto industry employee told the Korea Herald.
Kim Min-seung, head of research at the South Korean crypto exchange Korbit, also warned that a “sudden sell-off in South Korea-linked derivatives on Binance” outside trading hours could spark additional uncertainty when the Korea Exchange reopens the following day.
KOSPI, the Korea Composite Stock Price Index, rocketed to an all-time high last month as overseas investors poured billions into South Korean chipmakers.
The index shattered its intraday record on June 19, reaching 9,385.59 points on June 19. It also broke its closing record on June 22, 2026.
The KOSPI market cap has also surged by up to 112% this year, South Korean media outlets have reported.
Samsung Electronics’ share price is up over 141% in the year to date, with SK Hynix up over 291% in the same period.
Most forms of gambling are illegal in South Korea. However, experts say the nation is in the grips of a youth betting addiction crisis.
