Korean Retail Frenzy Triggers Harsh New Rules on US Leveraged ETFs

South Korea's Financial Supervisory Service (FSS) is implementing strict new rules requiring retail investors to complete a one-hour online course and a three-hour mock-trading exam before accessing foreign leveraged or inverse ETFs, effective December 15, 2025. This action follows an unprecedented surge in Korean retail investment into US leveraged products, reaching $7 billion in October alone, which regulators fear is distorting global markets. Officials are concerned that many investors misunderstand the daily rebalancing and compounding effects of these products, treating them as simple linear exposures. The retail frenzy, characterized by heavy buying of niche, high-leverage single-stock ETFs like SOXL (3x semiconductor) and those tracking IONQ, has also strained dollar funding markets, pushing the won-dollar exchange rate higher. The new measures aim to ensure investors acknowledge the basic, high-risk mechanics of these instruments.

(Source：BeInCrypto)