BlockBeats News, August 5th. Starting from July 31st, the South Korean financial regulatory authority significantly increased the base margin requirement for domestic and foreign single-stock leveraged products from a mix of securities to pure cash, from 10 million KRW to 30 million KRW. Subsequently, South Korean retail investors began rapidly adjusting their investment portfolios. According to data from the Korea Securities Depository, the Tesla 2x leveraged product, TSLL, recorded a net inflow of $14.58 million on August 3rd. However, on the 4th, the inflow plummeted from the previous day to $1.56 million, while the outflow rose to $8.68 million, resulting in a net outflow of $7.11 million for the day. During the same period, Tesla's spot market saw a net inflow of $42.30 million, more than 5 times the net inflow of TSLL.

Micron Technology and SanDisk exhibited a similar divergence. Micron's 2x leveraged product shifted from a net inflow of $10.81 million on the 3rd to a net outflow of $15.98 million on the 4th. SanDisk's 2x leveraged product changed from a net inflow of $17.74 million to a net outflow of $33.74 million. Meanwhile, the spot markets of both companies saw net inflows of $148 million and $145 million, respectively, indicating a significant trend of funds moving from leveraged instruments to underlying stocks.

This regulatory tightening required the base margin to be paid only in cash, with alternative securities such as stocks, ETFs, and bonds no longer being considered. Existing investors must also meet the new standard when adding to their positions. There are no restrictions on selling, but sale proceeds will only count towards cash margin after a T+2 settlement. The new rules, originally planned for a phased implementation in August, were brought forward to July 31st due to concerns that restricting only Korean products would lead to a surge of funds into overseas leverage products such as Tesla and NVIDIA, causing a balloon effect. The South Korean regulatory authority advanced the implementation date to July 31st and simultaneously extended the regulations to cover domestic and foreign products.

South Korean investors have strongly reacted to this, believing that extending measures aimed at local market volatility to overseas products is excessive intervention. They also argue that requiring only Korean investors to meet the 30 million KRW cash threshold puts them at a disadvantage in global competition.