South Korea Warns Offshore Perpetuals May Lack Domestic Legal Protections

South Korea’s financial regulator warned Friday that perpetual futures on offshore platforms may fall outside domestic legal protections, leaving local traders with limited safeguards if disputes or platform problems arise. These contracts have no set expiration date and can be traded around the clock. Some offerings let traders take positions at leverage ranging from 10 to 200 times. At 150 times leverage, an adverse move of about 0.66% in a contract tied to a South Korean stock index could trigger liquidation of the full investment. The example illustrates how a small price change can wipe out the money committed to a highly leveraged position. South Korean derivatives providers operate under rules that include investor safeguards.

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