Hokyun “Brad” Lim
P brad@decentlaw.ioBrad combines hands-on experience from COSMAX NBT, Korea Credit Information, and his own startup background to deliver practical advice in corporate and employment law.
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BlogsWorkers' Compensation Insurance Fraud Is Not Something You Can Take Lightly
What Does Workers' Compensation Insurance Fraud Mean Legally? Workers' compensation insurance fraud refers to falsely reporting an accident or illness that does not actually qualify as an industrial accident as if it were one, or misrepresenting the circumstances of the accident, work arrangement, or average wage, in order to wrongfully obtain workers' compensation benefits or premium advantages. Constitutes unlawful receipt of benefits under the Industrial Accident Compensation Insurance Act, subject to recovery of the wrongfully received amount as well as an additional surcharge If a falsified medical certificate or fabricated accident circumstances are confirmed, charges of fraud and forgery of private documents under the Criminal Act may also apply In many cases where the employer is involved, the employer is punished together with the employee as a co-principal As such, workers' compensation insurance fraud is not a mere administrative violation but a serious crime that can lead to criminal punishment, and this must be kept firmly in mind. From Detection to Trial: What Is the Process? Once suspicion of workers' compensation insurance fraud arises, the case generally proceeds through the following stages. Report and internal investigation The Korea Workers' Compensation & Welfare Service detects signs of irregularity and launches an investigation On-site verification and document request Medical records, work records, CCTV footage, and other objective evidence are cross-checked Referral to investigative authorities If clear evidence of fraudulent receipt is found, the case is referred to the police or prosecution Suspect investigation and referral After questioning those involved, the case is transferred to the prosecution Indictment and trial Sentences range from fines to actual imprisonment Because the direction of the initial statement and the preparation of supporting evidence largely determine the final outcome, it is critical to seek professional assistance as soon as you receive notice of an investigation related to workers' compensation insurance fraud. A Real Case of Workers' Compensation Insurance Fraud [Case We Handled] Mr. B, who ran a manufacturing company, falsified documents to make an employee's personal injury appear to be a work-related accident and applied for workers' compensation benefits, but the truth came to light during a verification investigation by the Korea Workers' Compensation & Welfare Service, leading to his being reported to the authorities. From the early stages of the investigation, Mr. B worked with Decent Law Firm to organize the facts and actively demonstrate his willingness to voluntarily return the benefits, ultimately resolving the case with a small fine. As shown, the outcome of a workers' compensation insurance fraud case can vary greatly depending on how it is handled in the early stages. The Role of Defense Counsel, and Why You Should Work With Decent Workers' compensation insurance fraud cases require professional handling in the following respects. Legal review of the Korea Workers' Compensation & Welfare Service's investigation materials Securing the right of defense during questioning and establishing a response strategy A comprehensive response that takes into account both recovery/additional surcharges and criminal punishment Based on extensive experience handling criminal cases related to industrial accidents and insurance, Decent carefully reviews each client's situation and builds a systematic defense strategy from the early stages of the investigation through trial. Workers' compensation insurance fraud is a type of case in which securing supporting evidence becomes increasingly difficult the longer you wait. If you have already received notice of an investigation or are troubled by related facts, we recommend consulting first with defense counsel experienced in labor and criminal cases rather than deciding on your own. Decent Law Firm is always ready to provide prompt and accurate legal consultation to help you find the best direction for your situation.
2026-08-06 -
Blogs
Workplace Harassment Lawyer: Why You Need to Act Before It's Too Late
What Does Workplace Harassment Mean Under the Law? Under Korea's Labor Standards Act, workplace harassment refers to conduct in which an employer or employee uses a position or relationship of superiority in the workplace to inflict physical or mental suffering on another employee, or to worsen the working environment, beyond the appropriate scope of work. Verbal abuse, ostracism, and unfair exclusion from work all qualify as harassment Employers must investigate promptly upon receiving a report Retaliating against a reporting employee carries a penalty of up to 3 years in prison or a fine of up to KRW 30 million Because the legal requirements and procedures are clearly defined, it is important to work with an attorney experienced in workplace harassment cases to organize the facts of your situation. From Reporting to Remedy: What Is the Process? Internal report — Filed with the HR department or a reporting center Fact-finding investigation — Conducted objectively by the employer Corrective action — Disciplinary measures against the perpetrator, workplace reassignment, etc. Complaint to the Ministry of Employment and Labor — Can be filed separately from an internal report, or if the employer's response is inadequate Damages claim — A civil lawsuit can be pursued alongside, if necessary Since early evidence collection and how you respond during questioning can determine the outcome, it is advantageous to seek legal assistance from the very start of the investigation. A Real Case: How a Workplace Harassment Case Was Resolved [Case We Handled] Ms. B, an employee in her twenties, endured ongoing verbal abuse and exclusion from work by a superior, but felt discouraged when the company's investigation turned out to be superficial. With the help of Decent Law Firm, she systematically organized recorded conversations and messenger records and filed a complaint with the Ministry of Employment and Labor, ultimately securing disciplinary action against the perpetrator and improvements to the working environment. As this case shows, the outcome of a workplace harassment case can vary greatly depending on how the evidence is organized and how the process is handled. Why You Should Work With Decent Law Firm Workplace harassment cases require the following areas of professional support: Protecting employee rights during the internal investigation process Preparing complaint and remedy application documents for the Ministry of Employment and Labor Developing a strategy for damages claims Drawing on extensive experience handling workplace harassment cases, Decent closely analyzes each client's situation and works alongside them systematically from the reporting stage through to final resolution. Workplace harassment is a classic example of a case where securing evidence becomes more difficult as time passes. If you are already experiencing harassment or considering filing a report, we encourage you not to make the decision alone, but to first calmly review the facts with an experienced professional. Decent is always ready to provide prompt, accurate consultations and help you find the best path forward for your situation.
2026-07-23 -
Blogs
Virtual Asset “Hwanchigi” in Korea: Penalties and Key Changes Under the 2026 Foreign Exchange Transactions Act
As cross-border transactions involving virtual assets and overseas payment services continue to increase, Korean regulators are paying closer attention to whether such transactions constitute unlicensed foreign exchange business or illegal remittance activities. The Korea Customs Service recently conducted targeted inspections of high-risk money exchange businesses and identified violations involving false transaction records, foreign currency sales exceeding statutory limits, and failures to report large cash transactions. The businesses selected for inspection also included entities suspected of using virtual assets for illegal cross-border remittances. A major regulatory change will take effect on December 3, 2026, when the amended Foreign Exchange Transactions Act comes into force. Under the amended Act, certain cross-border virtual asset transfer services will become subject to a separate registration requirement. Virtual asset service providers, payment companies, remittance operators, and businesses offering cross-border settlement services should review whether their current business models fall within the scope of the new registration regime. What Is “Hwanchigi” Under Korean Law? “Hwanchigi” is not a term expressly defined in the Foreign Exchange Transactions Act. It generally refers to an arrangement in which funds are transferred across borders without using a bank or another authorized foreign exchange institution. Instead, separate pools of funds or accounts in Korea and another country are used to produce the same economic effect as an international remittance. For example, a person in Korea may pay Korean won to a local operator, while the operator’s overseas partner pays an equivalent amount in foreign currency to the intended recipient abroad. The Korean won received in Korea is not physically transferred overseas. Nevertheless, because a corresponding payment is made abroad, the arrangement produces substantially the same result as an international remittance. Article 8 of the Foreign Exchange Transactions Act generally requires a person who engages in foreign exchange business as a commercial activity to obtain the necessary registration. A person may therefore be regarded as participating in foreign exchange business even if they did not personally send money overseas, provided that their role formed part of a broader structure designed to complete a cross-border payment. A Transaction May Be Regulated Even If No Foreign Currency Crosses the Border Under Korean foreign exchange law, the key issue is not whether the same cash or foreign currency physically crossed the border. What matters is whether payments made in Korea and abroad were connected in a manner that produced the same economic effect as a cross-border transfer. Common structures that may raise regulatory concerns include the following. ▪️ Korean Won Received in Korea and Foreign Currency Paid Overseas A Korean account receives the funds, while an overseas partner or local office pays foreign currency to the designated recipient abroad. ▪️ Funds Received Overseas and Korean Won Paid in Korea Foreign currency or local currency is received outside Korea, and Korean won is then paid into a designated Korean bank account. ▪️ Settlement Through Third-Party Accounts Funds are paid or received through accounts held by family members, employees, acquaintances, or unrelated business entities rather than the actual sender or recipient. ▪️ Offshore and Domestic Obligations Offset Against Each Other Amounts payable in Korea and abroad are offset, allowing the parties to settle without making a conventional international bank transfer. If these transactions are conducted repeatedly and the operator earns fees or profits from exchange-rate differences, the activity may be treated as unregistered foreign exchange business. Why the Supreme Court Treated Virtual Asset Arbitrage as Foreign Exchange Business In its September 4, 2025 decision, Supreme Court Case No. 2024Do16540, the Court confirmed that a transaction may constitute foreign exchange business even where no foreign currency was directly transferred across the border. In that case, the defendant received virtual assets from a non-resident located overseas, sold them through a Korean virtual asset exchange, and transferred the proceeds in Korean won to multiple domestic bank accounts designated by the non-resident. The defendant did not personally remit foreign currency overseas. Nevertheless, the Supreme Court upheld the lower court’s finding that the transaction performed substantially the same function as an inbound remittance service, in which a Korean foreign exchange bank pays Korean won to a domestic recipient based on payment instructions from a foreign bank. The relevant question was therefore not simply whether the defendant had directly sent funds abroad. The Court examined whether the overall transaction structure effectively facilitated payments between Korea and another country. However, the sale of virtual assets followed by a domestic Korean won transfer does not automatically constitute unregistered foreign exchange business in every case. The following factors should be considered together: ▪️ The purpose and background of the transaction ▪️ The size and frequency of the transactions ▪️ The duration and degree of repetition ▪️ Whether fees or exchange-rate profits were earned ▪️ Whether the activity was conducted as a business Can Virtual Assets and Overseas Payment Services Be Treated as Hwanchigi? The use of virtual assets or overseas payment services does not, by itself, exclude a transaction from the application of Korean foreign exchange laws. ▪️ Receiving Korean Won and Sending Virtual Assets to an Overseas Wallet Where Korean won is received in Korea and Bitcoin, USDT, or another virtual asset is sent to an overseas recipient in return, the transaction may be treated as a cross-border payment service rather than a simple virtual asset sale. ▪️ Receiving Virtual Assets Overseas and Paying Korean Won in Korea A transaction may also be treated as cross-border payment activity where virtual assets received from overseas are sold in Korea and the proceeds are paid into domestic accounts designated by the overseas party. ▪️ Settling Funds Through WeChat Pay or Alipay Regulatory concerns may arise where Korean won is received in Korea and an overseas payment account is funded abroad, or where funds are received overseas and Korean won is paid to a recipient in Korea. These transactions are not automatically illegal. The authorities will generally examine: ▪️ Whether the domestic payment corresponded to an overseas payment ▪️ Whether third-party accounts were used ▪️ Whether the activity was repeated ▪️ Whether the operator earned fees or exchange-rate profits ▪️ Whether the transaction was conducted for a commercial purpose Key Changes Under the 2026 Amendment to the Foreign Exchange Transactions Act The amended Foreign Exchange Transactions Act was promulgated on June 2, 2026 and will take effect on December 3, 2026. The amendment introduces three major changes. ▪️ Registration Requirement for Cross-Border Virtual Asset Transfer Services A virtual asset service provider that uses virtual asset sales, purchases, or exchanges to transfer value between Korea and another country, or to produce substantially the same effect, will be required to register with the Minister of Economy and Finance. A virtual asset service provider registration under the Act on Reporting and Using Specified Financial Transaction Information may not be sufficient by itself. A separate registration under the Foreign Exchange Transactions Act may be required where the business provides cross-border virtual asset transfer services. ▪️ Stronger Administrative Sanctions for Operating Outside the Registered Scope A specialized foreign exchange business operator that conducts foreign exchange activities outside its registered scope may be subject to: ▪️ Cancellation of registration ▪️ Business restrictions ▪️ Suspension of business ▪️ Administrative surcharges imposed in place of certain suspension measures Businesses should therefore confirm that their actual services remain within the scope of their registration. ▪️ Criminal Penalties for Unregistered Business and Certain Payment Procedure Violations A person who conducts cross-border virtual asset transfer business without registration may be subject to: ▪️ Imprisonment for up to three years ▪️ A fine of up to KRW 300 million The amended Act also introduces criminal penalties of: ▪️ Imprisonment for up to one year ▪️ A fine of up to KRW 100 million These penalties may apply where a person violates prescribed payment procedures for the purpose of obtaining an improper financial benefit for themselves or another person. The amendment does more than simply clarify which businesses must register. It expressly brings cross-border virtual asset transfer services within the registration framework and clarifies the scope of criminal liability for unregistered activities and certain payment procedure violations. The Substance of the Fund Flow Matters More Than the Name of the Transaction Virtual asset-based hwanchigi and arbitrage cases are primarily governed by the Foreign Exchange Transactions Act. Depending on the transaction structure, the following laws may also apply: ▪️ The Act on Reporting and Using Specified Financial Transaction Information ▪️ The Virtual Asset User Protection Act ▪️ Other criminal and financial regulations related to money laundering, fraud, or unlawful fund transfers Businesses and individuals should review the entire flow of funds, including: ▪️ The roles of the parties ▪️ Domestic and overseas bank transactions ▪️ Wallet transfers and transaction records ▪️ Fee and exchange-rate arrangements ▪️ The frequency and commercial nature of the activity Decent Law Firm’s Virtual Asset Practice Group advises clients on investigations involving alleged violations of the Foreign Exchange Transactions Act and virtual asset-based remittance activities. We also assist virtual asset businesses, payment providers, and cross-border settlement operators in assessing whether their services are subject to registration under the amended Act. Where the Korea Customs Service or the police requests attendance or submission of documents, or where a business needs to determine whether its services fall within the amended regulatory framework, the transaction structure and supporting records should be reviewed before responding. This publication is provided for general informational purposes only and does not constitute legal advice for any specific matter.
2026-07-13
