Hyeonsu “Elliot” Jin
MP elliot@decentlaw.ioElliot served as a corporate lawyer at Pyeongan Lawfirm and as in-house counsel for Chai Corporation, providing diverse corporate advisory services.
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BlogsKorea VASP Major Shareholder Changes: 30-Day Prior Reporting Requirement
Foreign investors acquiring shares in a Korean virtual asset service provider (“VASP”) should now consider regulatory reporting requirements before determining the closing date of the transaction. Under the amendments to Korea’s Specified Financial Transaction Information Act, effective August 20, 2026, major shareholders become subject to expanded reporting and screening requirements. Changes relating to major shareholders will also shift from post-change reporting to a prior report generally required 30 days before the change. 1. Who Qualifies as a Major Shareholder of a Korean VASP? A major shareholder is not determined solely by a shareholder’s ownership percentage. Under the amended Act, major shareholders include the largest shareholder and principal shareholders. A principal shareholder may include a person who: owns at least 10% of the VASP’s voting shares; alone or together with others appoints the representative director or a majority of directors; or exercises substantial influence over major management decisions or business operations. Certain shareholders who are related parties of the largest shareholder may also fall within the reporting scope. Where the largest shareholder is a corporation, persons further up the ownership chain, including certain controlling persons and representatives of that corporate shareholder, may also need to be identified. 2. When Is a Major Shareholder Change Report Required? From August 20, 2026, changes involving a VASP’s major shareholders are subject to prior reporting, generally 30 days before the proposed change. Previously, relevant changes were generally reported after the event within the applicable reporting period. Under the revised framework, major shareholder changes and changes to the VASP’s compliance framework are treated as prior-reporting matters. This means that a share acquisition or investment should be reviewed not only from a contractual perspective but also based on: the proposed signing date; the filing date; the anticipated regulatory review period; the closing date; and the date on which the actual ownership or control change occurs. A transaction timetable that does not account for the reporting process may create regulatory risk. 3. What Types of Transactions May Trigger a Major Shareholder Review? A major shareholder change should be considered where a transaction changes the VASP’s ownership or control structure. Examples include: an investor acquiring 10% or more of the voting shares; a share purchase resulting in a new largest shareholder; changes among existing shareholders that alter the largest shareholder; an acquisition of rights that gives an investor substantial influence over management; and a change in the upstream ownership structure of a corporate major shareholder. Accordingly, an investment below 10% does not automatically fall outside the scope of review. Governance rights, director appointment rights, shareholder agreements and other arrangements affecting actual control should also be considered. 4. What Will Be Reviewed in Relation to a Major Shareholder? The amended framework expands regulatory review to include a major shareholder’s legal compliance history, financial condition and social creditworthiness. The filing may require information concerning the major shareholder’s: identity and nationality; shareholding and ownership interests; relationship with the largest shareholder and related parties; relevant legal violation or criminal history; financial condition; and matters relevant to social creditworthiness. The scope of laws considered in the screening process has also been expanded to cover additional economic crime and virtual asset-related legislation, including corresponding foreign laws in certain cases. For foreign investors, this means that regulatory due diligence may need to extend beyond the Korean VASP itself. 5. What If the Largest Shareholder Is a Foreign Corporation? The analysis may extend beyond the entity directly holding the shares of the Korean VASP. Where the largest shareholder is a corporation, certain persons exercising substantial influence over that corporation, as well as its representative and other persons prescribed by law, may fall within the reporting scope. The Korean Financial Services Commission has also noted that where ownership extends through multiple corporate entities or where a major shareholder is located overseas, obtaining the required documentation may take considerable time. Foreign investors should therefore identify the relevant upstream ownership and control structure before setting a fixed transaction closing date. 6. Do Existing Korean VASPs Need to Take Action? Yes. Existing registered VASPs should also review their shareholder and control structures under the amended regime. The transitional provisions require VASPs that were already registered when the amended Act takes effect to file under the revised Article 7 requirements within three months from the effective date. Existing VASPs should therefore review: their current largest shareholder; shareholders holding 10% or more of voting shares; related-party holdings; shareholders exercising substantial management influence; and relevant upstream ownership where the largest shareholder is a corporate entity. 7. What Happens If the Prior Reporting Requirement Is Not Followed? A major shareholder change should not be treated as a routine post-closing filing. The FSC has specifically cautioned that implementing a change subject to prior reporting before receiving notice that the report has been accepted may constitute a violation and may result in criminal or administrative sanctions. Failure to submit a required change report, or submitting a false or otherwise improper change report, may also result in criminal penalties under the Act. For this reason, the regulatory filing and acceptance process should be incorporated into the transaction structure before closing. 8. What Should Foreign Investors Check Before Investing in a Korean VASP? Before acquiring shares or control of a Korean VASP, the parties should review the following matters: post-transaction voting ownership; whether related-party holdings need to be aggregated; whether the investor will become the largest or a principal shareholder; director appointment and other governance rights; the ownership structure above any corporate shareholder; major shareholder screening issues; documents required from overseas shareholders; and the relationship between regulatory filing and transaction closing. Where a prior report is required, the transaction documents should also address whether acceptance of the regulatory filing will be a condition precedent to closing, the parties’ cooperation obligations and the consequences of delay or non-acceptance. 9. Frequently Asked Questions Q1. Does an investor holding less than 10% fall outside the major shareholder rules? Not necessarily. Even below the 10% threshold, a shareholder may fall within the scope of a principal shareholder if it exercises substantial influence over major management decisions or business operations. Q2. Can the parties sign a share purchase agreement before filing the major shareholder change report? Signing and the actual change in ownership or control should be distinguished. The key issue is that a change subject to prior reporting should not be implemented before the required reporting and acceptance process is completed. For this reason, the regulatory process should be reflected in the closing conditions and transaction timetable. Q3. Are overseas corporate shareholders also subject to review? Yes. Where the largest shareholder is a foreign corporation, the analysis may extend to its upstream ownership and controlling persons. Relevant corporate and ownership documents should therefore be prepared in advance. 10. Key Takeaways Effective August 20, 2026, changes relating to a Korean VASP’s major shareholders are generally subject to a 30-day prior reporting requirement. The analysis is not limited to a 10% ownership threshold. Changes involving the largest shareholder, substantial management influence or an upstream corporate ownership structure may also require review. Foreign investors considering an investment, share acquisition or M&A transaction involving a Korean VASP should therefore assess the major shareholder status, reporting requirements and transaction timeline before closing.
2026-08-18 -
Blogs
Revenge Driving Penalties in Korea: From Special Intimidation to License Suspension or Revocation
1. What Legally Counts as Revenge Driving? There is no separate criminal charge called "revenge driving." Instead, when a driver uses a vehicle to inflict injury, assault, intimidation, or property damage on a specific other party, it becomes a matter of the corresponding aggravated ("special") offense under the Criminal Act. Article 93(1)(10-2) of the Road Traffic Act also separately provides for license suspension or revocation where a driver, using a vehicle, has violated the Criminal Act's provisions on special injury, special assault, special intimidation, or special property damage. So determining whether revenge driving occurred is not simply about whether the driving was rough. For example, after becoming angry over another vehicle cutting in or honking, a driver might chase that vehicle and then: Cut in front of the other vehicle and brake suddenly Repeatedly block its path Drive in a way that pushes the other vehicle sideways Deliberately collide with the vehicle Block the vehicle so the driver cannot get out These kinds of actions may be reviewed as revenge-driving-related offenses depending on the specific driving method and circumstances. However, the mere fact that there was sudden braking or a lane change does not automatically make it revenge driving. It is necessary to examine together whether the driving was required by traffic conditions, whether the action targeted a specific driver, and whether it actually posed a threat to the other party. 2. When Is Revenge Driving More Likely to Be Established? Whether revenge driving is established is determined comprehensively based on the intent toward a specific counterpart, the danger of the driving conduct, and the sequence of events before and after the incident. 1) Did It Target a Specific Vehicle? If, after a dispute with another vehicle, the driver followed only that vehicle and repeatedly obstructed its path, whether the conduct was directed at a specific person becomes a key issue. Conversely, if a driver happened to brake suddenly in a traffic jam or changed lanes to avoid an obstacle, the same vehicle movement may be evaluated differently. 2) How Dangerous Was the Actual Driving? The following facts can serve as concrete evidence for this determination. Distance between vehicles Driving speed at the time Degree of sudden braking Number and interval of lane changes Number of lanes and traffic volume on the road Degree of collision risk Whether an actual contact or accident occurred Whether the other vehicle had to brake or swerve suddenly to avoid it The point that what matters is not the vehicle itself as a means, but how it was used, is also confirmed in Supreme Court rulings on "dangerous objects." 3) What Was the Situation Before and After the Incident? In revenge driving cases, an emotional response is sometimes triggered by a honk, high beams, or a lane change. Therefore, in addition to dashcam footage, audio, vehicle driving records, and nearby CCTV footage, if available, should be checked together to confirm the flow of events. 3. How Is Reckless Driving Different From Revenge Driving? The biggest difference is that reckless driving governs cases where a driver commits several dangerous driving acts under the Road Traffic Act in succession, or continues or repeats a single act, whereas revenge driving involves a vehicle-related crime directed at a specific counterpart. Comparing the two is as follows. Category Revenge Driving Reckless Driving Key issue Threats, assault, injury, or property damage directed at a specific counterpart Continuous, sustained, or repeated dangerous driving conduct Applicable law Special intimidation, special assault, special injury, special property damage, etc. under the Criminal Act Article 46-3 of the Road Traffic Act Specific counterpart An important factor in the determination Not necessarily required Number of acts Not determined by number alone Two or more consecutive acts, or one act that is sustained or repeated Penalty The relevant Criminal Act provision applies depending on the actual conduct Imprisonment of up to 1 year or a fine of up to KRW 5 million Reckless driving may be punished with imprisonment of up to one year or a fine of up to KRW 5 million under Article 151-2 of the Road Traffic Act. It is difficult to automatically rule out the possibility of revenge driving simply because the driving conduct occurred only once. Conversely, driving dangerously multiple times does not automatically make it revenge driving either, so it must be specifically confirmed against whom, with what intent, and in what manner the driving was carried out. 4. How Severely Can Revenge Driving Be Punished? Article 93 of the Road Traffic Act also specifies these four types of offenses committed using a vehicle as grounds for administrative action against a driver's license. If a Vehicle Was Used to Threaten: Special Intimidation If a vehicle is used to threaten the other party as if to cause harm, special intimidation may be reviewed. Special intimidation under Article 284 of the Criminal Act is punishable by imprisonment of up to 7 years or a fine of up to KRW 10 million. If a Vehicle Was Used to Assault: Special Assault If conduct using a vehicle is evaluated as assault against a person's body, special assault may become an issue. Article 261 of the Criminal Act provides that special assault is punishable by imprisonment of up to 5 years or a fine of up to KRW 10 million. If the Other Party Was Injured: Special Injury If the other party actually suffered injury as a result of revenge-driving conduct using a vehicle, special injury may be reviewed. Special injury under Article 258-2(1) of the Criminal Act is punishable by imprisonment of 1 to 10 years. Unlike special intimidation or special assault, a fine is not provided as an alternative penalty. If the Other Vehicle Was Damaged: Special Property Damage If the other vehicle was damaged by conduct such as deliberately ramming it, special property damage may become an issue. Article 369(1) of the Criminal Act provides that special property damage is punishable by imprisonment of up to 5 years or a fine of up to KRW 10 million. However, which charge actually applies in a given case is not determined simply by whether a collision occurred; the applicable charge may vary depending on the specific facts, including the vehicle's movement, whether there was an impact, the distance to the other party, and whether an injury occurred. 5. Can Revenge Driving Lead to License Suspension or Revocation? Yes. Revenge driving can also be subject to administrative action against a driver's license, separate from criminal punishment. Under the current Enforcement Rule of the Road Traffic Act, Attached Table 28 provides that 100 penalty points are imposed when a person is booked for revenge driving involving special injury or similar offenses under the Criminal Act using a vehicle. The same table also provides that a driver becomes subject to license suspension once their cumulative penalty points reach 40 or more, with points generally converted to days on a one-point-per-day basis. In addition, since a cumulative score of 121 points or more within one year can meet the criteria for license revocation, drivers who already have existing penalty points need to check their existing cumulative score together with the 100 points imposed for revenge driving. Meanwhile, where a person is detained for committing special injury, special assault, special intimidation, or special property damage using a vehicle, the Enforcement Rule also sets out separate criteria for license revocation. Therefore, one should not assume that "paying a fine is the end of the matter." Separate from the handling of the criminal case, it is necessary to check the administrative disposition of one's license based on current penalty points, whether criminal charges have been filed, and whether detention has occurred. 6. What Should You Do First If You're Reported for Revenge Driving? The first thing to do is preserve objective evidence that can establish the entire flow of driving at the time of the incident. 1) Preserve the Original Dashcam Footage Rather than cutting out only the portion where the dispute with the other party occurred, it is better to preserve the footage from before the incident through to its end. 2) Organize the Reasons for Sudden Braking or Lane Changes If there were driving-related reasons at the time, such as a traffic signal, braking by the vehicle ahead, a pedestrian or obstacle, or a merging section, these should be organized in detail. 3) Organize the Sequence of Events It is necessary to organize, in chronological order, everything from the point of the initial lane change or honking to the point when one's own driving conduct ended. 4) Secure Objective Evidence In addition to dashcam footage, it is good to check vehicle GPS data, nearby CCTV footage, passenger statements, and photos of vehicle damage, if available. 5) Distinguish the Charges and Facts Before the Police Investigation The facts and legal issues that need to be explained may differ depending on whether special intimidation, or special assault, special injury, or even special property damage is at issue. 7. Frequently Asked Questions (FAQ) Q1. Can a single sudden stop lead to a revenge driving conviction? A single sudden stop does not automatically amount to revenge driving, but the possibility of revenge driving is not necessarily ruled out simply because it happened only once. It is necessary to check whether the driver targeted the other vehicle, blocked it, and then braked suddenly in a situation with a high risk of collision, or whether the braking was necessary for traffic reasons. Q2. Can someone be punished for revenge driving even without colliding with the other vehicle? Yes, it is possible. Even without an actual collision, if conduct using a vehicle is evaluated as a threat against the other party, special intimidation may become an issue. Since special intimidation is not a crime that requires vehicle damage or injury as an essential element, it is necessary to specifically examine whether there was a threatening element, based on factors such as the distance between vehicles, speed, and the degree of sudden braking or blocking of the path. Q3. If a settlement is reached with the victim, does that mean the revenge driving case will not be punished? Reaching a settlement does not automatically mean that every revenge driving case will be closed. Even if a settlement is pursued, it is necessary to check the applicable charge, the extent of harm, and the stage of the investigation together. 8. Key Takeaways Even the same act of sudden braking or path obstruction can be evaluated differently under the law, depending on the driving conditions at the time, the intent toward the other party, and the degree of threat involved. In particular, dashcam footage and the flow of driving before and after the incident can be important evidence for determining whether revenge driving is established and which charge applies, so it is necessary to preserve the original footage. As this can involve not only criminal punishment but also suspension or revocation of a driver's license, it is important to specifically check what issues exist in your situation before the police investigation, so you should be sure to get help from an expert to gather the materials your case needs. Decent Law Firm, based on its experience resolving numerous revenge driving cases, reviews dashcam footage and the circumstances before and after the incident to organize the charges and issues that may actually apply. If you are facing a police investigation, we can also help you organize the reasons for your driving conduct and the circumstances at the time based on objective evidence, and, where necessary, we can help review your response at each stage of the investigation together, including settlement with the victim and submission of a written opinion.
2026-08-18 -
Blogs
When Does Crypto Trading Violate Korea's Specified Financial Transaction Information Act? Standards and Penalties Explained
Trading virtual assets frequently, or trading large amounts, does not by itself mean that someone has violated Korea's Specified Financial Transaction Information Act (특금법). What matters most is whether a person carried out virtual asset buying, selling, exchanging, transferring, storing, or brokering as a business for other people — and whether that person, as a Virtual Asset Service Provider (VASP), failed to file the required report with Korea's Financial Intelligence Unit (FIU). The Supreme Court of Korea has held that whether someone qualifies as a VASP must be judged comprehensively, taking into account the purpose and type of the transactions, their scale and frequency, the period and method of trading, and other relevant circumstances. Table of Contents What Is a Violation of the Specified Financial Transaction Information Act? Which Types of Violations Arise in Virtual Asset Trading? How Is Personal Coin Trading Distinguished From Operating a Virtual Asset Business? Can OTC, P2P, or USDT Trading Also Violate the Act? What Are the Penalties for Violating the Act? What Should You Check If You Are Being Investigated for a Suspected Violation? Frequently Asked Questions Summary and Points to Note 1. What Is a Violation of the Specified Financial Transaction Information Act? A violation of the Act refers to a breach of the reporting, notification, or customer due diligence obligations set out in the Act on Reporting and Using Specified Financial Transaction Information (특정 금융거래정보의 보고 및 이용 등에 관한 법률). The Act imposes certain obligations on financial companies and Virtual Asset Service Providers (VASPs) in order to prevent money laundering and the financing of illegal activities. In the virtual asset sector, the issue that most commonly arises for individuals and unregistered operators is operating a virtual asset trading business — while qualifying as a VASP — without filing the required report with the FIU. Accordingly, what matters is not simply the fact that coins were traded, but rather for whose benefit and through what structure the trading was carried out, and whether it was conducted continuously and repeatedly as a business. [Related Legislation] Act on Reporting and Using Specified Financial Transaction Information — Korea Law Information Center 2. Which Types of Violations Arise in Virtual Asset Trading? In the virtual asset sector, issues can arise not only from operating without registration, but also from failing to file required notifications or changes of registration, and from breaching anti-money laundering obligations. These can generally be divided into the following categories. Unregistered virtual asset business This refers to operating a virtual asset trading business — while qualifying as a VASP — without filing the required report with the FIU. Depending on the actual structure of the trades, even individual-to-individual OTC or P2P transactions may be found to constitute an unregistered virtual asset business. Failure to file required notifications or changes of registration Even a VASP that has already filed a report must file a notification of change, following the procedure set out in the Act, whenever the details of its original filing change. In particular, from August 20, 2026, the amended Act and its subordinate regulations take effect, tightening VASP registration requirements. Under the amended system, the scope of screening expands to cover the legal violation history, financial status, and social credibility of controlling shareholders, and a VASP's organizational structure, personnel, IT systems, and internal control system also become substantive elements of the registration review. In addition, notifications relating to controlling shareholders and the compliance system will shift from after-the-fact filing within 14 days of the change to advance filing 30 days before the change takes place. If a matter subject to advance filing is carried out before it has been accepted by the authorities, criminal penalties or administrative sanctions may follow — so VASPs planning changes to their governance structure or compliance system should check the filing timeline well in advance. [Related Source] Financial Services Commission & Korea Financial Intelligence Unit, "Comprehensive Revision of the VASP Registration Manual in Line With Strengthened VASP Registration Requirements" (Aug. 13, 2026) 3. How Is Personal Coin Trading Distinguished From Operating a Virtual Asset Business? Whether someone qualifies as a VASP is not determined by transaction amount or frequency alone. The Supreme Court has held that the following factors must be considered together: The purpose and type of the transactions The scale and frequency of the transactions The period over which the trading continued The specific method of trading Whether the trading was carried out for another person's benefit Whether consideration was received for the trading The Court found that an ordinary user who buys, sells, or exchanges virtual assets on an exchange solely for their own benefit and on their own account is, absent special circumstances, unlikely to be treated as a VASP. On the other hand, a person who continuously and repeatedly trades virtual assets for an indefinite number of customers or users, and receives consideration for doing so, may in principle qualify as a VASP. Criteria for distinguishing personal trading from a virtual asset business Category Personal Virtual Asset Trading Trading Likely to Be Treated as a Virtual Asset Business Purpose of trading Personal investment or asset management Providing trading convenience to another person Counterparty Self-directed trading through an exchange Customers or an indefinite number of users Source of funds Mainly the trader's own funds Involvement of customer or third-party funds Profit Capital gains from investment Fees, spreads, or other trading consideration Method of trading Based on the trader's own judgment At another party's request Continuity Depends on investment circumstances Continuous and repeated in a set manner A large trading volume does not, on its own, make trading a virtual asset business if it was conducted with the trader's own funds. Conversely, even a relatively small trading volume may require a review of VASP registration obligations, if the trader repeatedly bought and sold coins at the request of multiple people and received consideration for doing so. [Related Case Law] Supreme Court, Judgment of Dec. 12, 2024, Case No. 2024Do10710 4. Can OTC, P2P, or USDT Trading Also Violate the Act? Trading virtual assets through OTC or P2P methods does not, by itself, make the trading illegal. What matters is the actual structure of the transactions. If a person purchases USDT with their own funds and trades it on their own account, this is likely closer to ordinary investment activity. On the other hand, the following types of trading warrant a review of whether they constitute an unregistered virtual asset business: Repeatedly buying and selling USDT or other assets at the request of multiple people Receiving Korean won and sending the corresponding virtual asset to the other party's wallet Continuing to trade while receiving fees or spreads Brokering or carrying out another person's virtual asset trading, exchange, or transfer on their behalf Accordingly, what matters is not simply the trading volume, but whose funds were used, how the counterparties were found, and what consideration was received. 5. What Are the Penalties for Violating the Act? The severity of the penalty depends on which reporting obligation was breached. Criminal penalties for violations of the Act Type of Violation Penalty Operating a virtual asset business without filing a report with the FIU Imprisonment for up to 5 years, or a fine of up to KRW 50 million Filing a report through false or fraudulent means and operating a business Imprisonment for up to 5 years, or a fine of up to KRW 50 million Failing to file a required notification of change Imprisonment for up to 3 years, or a fine of up to KRW 30 million Filing a notification of change through false or fraudulent means Imprisonment for up to 3 years, or a fine of up to KRW 30 million These statutory penalty ranges remain unchanged under the amended Act, which takes effect on August 20, 2026. That said, actual cases also take into account the period and scale of trading, the profit obtained, and each party's role and degree of involvement. Depending on the trading method used, it is also necessary to separately review whether charges such as violation of the Foreign Exchange Transactions Act, fraud, or offenses related to proceeds of crime may also apply. 6. What Should You Check If You Are Being Investigated for a Suspected Violation? The first step is to organize all trading activity into transactions made for your own investment and transactions made on behalf of others. A large volume of account deposits and withdrawals or virtual asset transactions does not, on its own, reveal the true nature of the trading. Before an investigation, it is worth reviewing the following materials: Trading and transfer records from exchanges and personal wallets Deposit and withdrawal records for accounts used in the trading KakaoTalk, Telegram, or other messages exchanged with counterparties The actual profit structure, such as fees or spreads received How each counterparty was found, and the role each participant played In particular, if funds were repeatedly received in Korean won from multiple people and virtual assets were sent in return, it is essential to first trace the flow of funds and determine which deposit corresponds to which virtual asset transaction. Based on this, you should be able to explain whether you were an investor trading on your own account, or someone who continuously and repeatedly carried out virtual asset trading on behalf of others. 7. Frequently Asked Questions Q1. Does trading coins frequently automatically mean I have violated the Act? Frequent trading alone does not constitute a violation. If the trading was carried out for your own benefit and on your own account, it may qualify as ordinary virtual asset investment. However, if you repeatedly traded at another person's request and received consideration for doing so, this requires separate review. Q2. If I buy USDT low and sell it high, do I need to file a report? Earning a profit from the price difference alone does not make someone a VASP. The determination depends on whether the profit came from personal investment, or from repeatedly supplying USDT to customers while receiving fees or spreads. Q3. Is it a problem if I bought coins on behalf of an acquaintance as a favor? A one-off favor and continuous, repeated conduct of this kind must be distinguished. Relevant factors include the number and period of the transactions, whether consideration was received, and how far the range of counterparties expanded. 8. Summary and Points to Note Whether a violation of the Act has occurred is not determined by the amount or frequency of virtual asset trading alone. The key factor in distinguishing personal investment from an unregistered virtual asset business is whose funds were used, for whose benefit the trading was carried out, and what consideration was received. In addition, from August 20, 2026, the registration review and certain notification-of-change procedures for VASPs will be strengthened, so existing operators should also confirm the requirements and filing deadlines under the revised registration manual. Decent Law Firm reviews VASP status, violation risk under the Act, and investigation response strategy based on the structure of virtual asset transactions and the flow of funds involved.
2026-08-14
