BlockBeats News, May 19th. Several funeral prepayment service companies in South Korea were exposed to insolvency, with some companies even embezzling customer funds to invest in cryptocurrency-related assets. An investigation showed that out of 75 funeral prepayment service companies in South Korea, 32 companies had total assets lower than the prepayment funds from customers, accounting for 42.7%.

Among them, the seventh-ranked in the industry, 'Parent's Love (부모사랑)', had invested 59.5 billion Korean won in an Ethereum concept stock Bitmine double-leveraged ETF. However, due to the crypto market crash, the book value had plummeted to 10.2 billion Korean won by the end of last year, with a huge unrealized loss of 49.3 billion Korean won (approximately $33 million).

The report pointed out that since South Korean law classifies the funeral prepayment industry as a "prepayment installment transaction business" rather than a financial institution, it is not subject to strict financial regulatory requirements such as capital adequacy ratios, risk assets, or fund usage, only needing to ensure a 50% reserve for customer prepayments.

In addition, some companies were exposed for lending customer funds to major shareholders or affiliated companies. South Korean industry insiders have warned that due to regulatory loopholes, the issue of "zombie funeral companies" is continuing to grow, and if a large number of customers simultaneously request refunds, some companies may not be able to meet their obligations.