On July 17, Direxion Daily South Korea Bull 3X Shares (KORU) fell 12.49% in regular trading to $15.79/share, with turnover of $169 million. The decline was driven by the Bank of Korea's surprise rate hike and a regulatory crackdown on leveraged ETF products triggering accelerated deleveraging across Korean equities.

The Bank of Korea on July 16 raised its benchmark rate 25 basis points to 2.75%, the first hike since January 2023, citing a weakening won, June CPI at 3.2%, and 75 consecutive weeks of rising home prices. Deutsche Bank forecasts three additional 25bp hikes to 3.50% by Q2 next year. Simultaneously, Korea's Financial Services Commission tightened single-stock leveraged ETF rules, tripling minimum margin requirements to 30 million won, capping trades at 20 shares, and banning new product listings. Foreign and institutional investors concentrated selling in tech names, with domestic institutions offloading approximately $738 million in ETFs on the day. Leveraged ETF AUM has contracted from a peak of 2.4 trillion won to 1.7 trillion won, with analysts estimating the deleveraging process is only 30-40% complete.

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