Pureun “Ian” Hong
MP ian@decentlaw.ioIan served as criminal law expert at YK Lawfirm, handling various corporate litigations including private fund investments, STOs, and capital markets.
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BlogsKorea Refers Approximately 30 Virtual Asset Market Manipulation Cases for Investigation: Key Findings and Legal Risks
The Financial Services Commission and the Financial Supervisory Service have released the results of their first two years of enforcement under Korea’s Virtual Asset User Protection Act. As of July 20, 2026, the authorities had completed investigations into approximately 40 cases and referred or reported around 30 cases to investigative authorities. A total of 25 individuals were identified as suspects, with average alleged unlawful gains of approximately KRW 1.4 billion per case. Enforcement Results Under Korea’s Virtual Asset User Protection Act Korea’s Virtual Asset User Protection Act took effect on July 19, 2024. The Act prohibits unfair trading activities in the virtual asset market, including the misuse of material non-public information, market manipulation, and fraudulent trading practices. Among the approximately 30 cases referred or reported to investigative authorities, most involved suspected market manipulation. The authorities also identified several fraudulent trading cases involving false or misleading information distributed through social media. The key enforcement figures announced by the Korean financial authorities include: ▪️ Approximately 40 investigations completed ▪️ Approximately 30 cases referred or reported to investigative authorities ▪️ 25 individuals identified as suspects ▪️ Average alleged unlawful gains of approximately KRW 1.4 billion per case ▪️ An average of approximately eight virtual assets involved per case A referral or report does not mean that a criminal conviction has been entered. It means that the financial authorities identified suspected violations and transferred the matter to investigative authorities. Some of the announced cases remain under criminal investigation or are currently being tried in court. Market Manipulation Methods Identified by Korean Regulators Manipulating Price-Ranking Systems One method involved concentrating orders at specific times when a trading platform’s price-change rankings were reset. By pushing a virtual asset into the list of top-performing assets, traders could attract additional buying interest and then sell their existing holdings at higher prices. A large purchase made at a particular time does not automatically constitute market manipulation. However, regulators may examine whether the orders were intended to influence rankings, attract other investors, and facilitate the subsequent disposal of previously held assets. Exploiting Temporary Suspension of Deposits and Withdrawals Another method involved taking advantage of situations in which deposits and withdrawals of a particular virtual asset were temporarily suspended on one or more exchanges. When assets cannot be transferred to or from the exchange, the price on that exchange may become temporarily disconnected from prices elsewhere. Traders may attempt to increase the internal exchange price through concentrated purchases and then sell their holdings at the inflated price. A deposit or withdrawal suspension is not itself evidence of misconduct. The legal issue is whether a person deliberately exploited the restricted market environment to create an artificial price and induce trading by other users. High-Frequency and Deceptive Orders Using APIs An application programming interface, or API, allows orders to be submitted automatically through trading software. The authorities identified cases in which API keys and multiple accounts were allegedly used to submit high-frequency buy and sell orders, including orders that were not intended to be genuinely executed. In one case, the authorities found that automated orders and deceptive bids were allegedly used to increase the market price before virtual assets associated with the issuing foundation were sold at higher prices. Using an API or automated trading system is not unlawful by itself. The key question is whether the orders reflected a genuine intention to trade or were designed to create a false impression of market demand and induce other users to buy or sell. False Social Media Statements and Meme Coin Trading The authorities also identified a case in which persons connected to a meme coin allegedly purchased the asset in advance, published false information through social media, and then sold their holdings after additional buyers entered the market. Promoting a virtual asset project, exchange listing, partnership, or business plan is not automatically unlawful. However, publishing nonexistent investment arrangements, partnerships, or development plans as if they were true—and using that information to sell previously acquired assets—may constitute fraudulent trading under Korean law. How Is Legitimate High-Volume Trading Distinguished from Market Manipulation? Purchasing an asset before its price rises and later selling it at a profit does not, by itself, establish market manipulation. Korean financial and investigative authorities generally examine the purpose and overall pattern of the trading activity rather than viewing each order in isolation. Relevant factors may include: ▪️ Whether repeated high-priced purchases or deceptive orders were submitted ▪️ Whether there was a genuine intention to execute the orders ▪️ Whether multiple accounts acted under common instructions ▪️ Whether the accounts were connected to an issuing foundation or major holder ▪️ Whether significant holdings were sold immediately after the price increased ▪️ Whether social media posts were closely connected to the timing of sales ▪️ Whether orders across Korean and overseas exchanges were coordinated Even where accounts or API keys were registered in another person’s name, investigators may examine who actually controlled the trading, who gave the instructions, and who ultimately received the profits. Criminal Penalties and Administrative Surcharges Virtual asset market manipulation and fraudulent trading may result in both criminal penalties and administrative surcharges intended to recover unlawful gains. According to the financial authorities’ announcement, the statutory minimum term of imprisonment increases according to the amount of unlawful gains: ▪️ Less than KRW 500 million: imprisonment for at least one year ▪️ KRW 500 million to less than KRW 5 billion: imprisonment for at least three years ▪️ KRW 5 billion or more: imprisonment for at least five years The actual penalty may vary depending on the conduct involved, the calculation of unlawful gains, the level of participation, and whether additional fines, confiscation, or collection orders are imposed. In the announced enforcement results, administrative surcharges equivalent to approximately 125% to 165% of the unlawful gains were imposed in one fraudulent trading case and one market manipulation case. A market manipulation matter may therefore proceed beyond an exchange account restriction. It may lead to regulatory investigation, referral or reporting to investigative authorities, criminal investigation, prosecution, trial, and a separate administrative surcharge proceeding. AI-Based Monitoring and Future Regulatory Measures Korean financial authorities have introduced AI-based market surveillance and investigation systems capable of conducting real-time monitoring, analyzing orders on a second-by-second basis, and automatically identifying potentially suspicious accounts and trading periods. Korean virtual asset exchanges have also strengthened their continuous monitoring systems. Exchanges may report suspicious trading to financial or investigative authorities and may issue warnings or restrict orders when potentially abusive trading patterns are repeatedly detected. The authorities are also considering whether to include the following measures in the proposed second-stage Digital Asset Act: ▪️ Freezing accounts and financial accounts to prevent the concealment of unlawful gains ▪️ A reporting and reward system for the early detection of unfair virtual asset trading These measures were under consideration at the time of the announcement and should not be treated as fully implemented rules. Responding to a Market Manipulation Investigation in Korea A person who receives an account restriction or a request for an explanation from a Korean virtual asset exchange should first identify the specific orders and trading periods under review. Where automated trading or market-making activities were conducted, relevant evidence may include: ▪️ Order, execution, and API usage records ▪️ Automated trading settings and documented trading strategies ▪️ The relationship between the registered account holder and the actual operator ▪️ Communications with the issuing foundation or major asset holders ▪️ Transfers between personal wallets and virtual asset exchanges ▪️ The basis and circumstances for social media statements ▪️ Records showing how trading profits were received and distributed Automated trading or high-volume trading does not automatically establish market manipulation. However, simply stating that the activity was a legitimate investment may not be sufficient. The trading purpose, genuine intention to execute orders, relationship between accounts, and ultimate recipient of the profits should be explained through objective records. Decent Law Firm advises clients on exchange inquiries, investigations by Korean financial authorities, police and prosecution proceedings, and criminal trials involving alleged virtual asset market manipulation and fraudulent trading. This content is provided for general informational purposes only and does not constitute legal advice for any individual matter.
2026-07-21 -
Blogs
Korea’s Suspicious Account Transaction Freeze System: What Scam Victims and Account Holders Need to Know
Since June 30, 2026, financial institutions in Korea have been able to promptly restrict transactions involving accounts suspected of being used in emerging phishing schemes, including no-show scams and romance scams. Victims should report the incident before the funds are transferred elsewhere. At the same time, an account holder whose account has been frozen despite receiving legitimate payment must be prepared to prove the underlying transaction with objective evidence. What Is the Suspicious Account Transaction Freeze System? Korea’s 「Special Act on the Prevention of Loss Caused by Telecommunications-Based Financial Fraud and Refund for Losses」 provides procedures for freezing accounts used in voice phishing schemes and refunding eligible victims. However, fraudulent schemes disguised as ordinary transactions involving goods or services have generally fallen outside the scope of the conventional voice phishing refund framework. This created practical difficulties in promptly restricting accounts used in scams presented as product purchases, investments, or service transactions. To address this issue, the Financial Services Commission, the Korea Financial Intelligence Unit, and the National Police Agency introduced a system on June 30, 2026, allowing suspicious accounts linked to emerging phishing schemes to be temporarily restricted through existing customer due diligence procedures. Once an account is identified as potentially connected to such a scheme, the financial institution may classify the account holder as subject to enhanced customer due diligence under the 「Act on Reporting and Using Specified Financial Transaction Information」 and restrict incoming and outgoing transactions. What Types of Scams May Be Covered? The system may apply to various forms of emerging phishing fraud, including the following. ▪️No-Show Scams A fraudster impersonates a public institution or corporate buyer, promises a large order, and instructs the victim to purchase goods or materials from a designated supplier. ▪️Romance Scams A fraudster builds a personal relationship through social media or messaging applications and later requests money for investments, business expenses, customs charges, medical costs, or similar reasons. ▪️Investment Scams A fraudster promises profits from stocks, virtual assets, overseas futures, or other investments, receives funds from the victim, and then blocks withdrawals or demands additional payments. However, an account is not automatically frozen simply because money was transferred and a dispute later arose. Authorities must distinguish between an ordinary contractual dispute and conduct involving deception through telecommunications and circumstances indicating possible fraud. Financial institutions and the police may review transaction records, communications, the method used by the suspected offender, and whether the promised goods or services were actually provided. How Does the Transaction Freeze Process Work? 1. Victim Report and Temporary Action by the Financial Institution A person who suspects that they have been targeted by an emerging phishing scam should immediately report the matter by calling 112 or visiting a nearby police station in Korea. A financial institution may take temporary action when it identifies a suspicious transaction through its fraud detection system or receives a report from the victim or the police. The account may therefore be temporarily restricted before the authorities have conclusively determined whether the case involves conventional voice phishing or another form of emerging phishing fraud. 2. Police Review of the Fraud Type The National Police Agency’s Integrated Response Center for Telecommunications Financial Fraud reviews whether the transaction involved a genuine sale of goods or services and examines the specific method used by the suspected offender. When the case is classified as conventional voice phishing, the existing account freeze and victim refund procedures under the telecommunications financial fraud legislation may apply. When the case is classified as an emerging phishing scheme, the relevant account may instead be placed under enhanced customer due diligence procedures. 3. Temporary Transaction Freeze for Seven Business Days Once the account is identified as being connected to an emerging phishing scheme, the financial institution may temporarily restrict both incoming and outgoing transactions. The Korea Financial Intelligence Unit then reviews the transaction history and the relationship between the victim and the account holder within seven business days of receiving the report. 4. Additional Freeze of Up to 60 Business Days When the Korea Financial Intelligence Unit determines that the restriction should remain in place, the financial institution may continue the freeze for an additional 30 business days after the initial seven-business-day period. At the request of the police, the restriction may be extended once for another 30 business days. During this period, the police may investigate the account’s connection to the suspected crime and trace the movement of funds. An Account Freeze Does Not Automatically Guarantee a Refund A suspicious account transaction freeze is intended to prevent funds from being transferred out of an account believed to have been used in a fraudulent scheme. It does not mean that the victim is automatically entitled to an immediate or full refund. In conventional voice phishing cases, the statutory process for extinguishing the account balance and refunding eligible victims may apply. By contrast, a transaction freeze involving an emerging phishing scheme relies on customer due diligence measures under Korea’s financial transaction reporting legislation. It therefore operates differently from the statutory refund process applicable to conventional voice phishing cases. The method and likelihood of recovery may depend on factors including: ▪️The amount remaining in the account ▪️The number of victims ▪️The nature of the suspected fraud ▪️The outcome of the criminal investigation ▪️Whether the account holder or another participant received or transferred the funds Depending on the circumstances, the victim may need to file a criminal complaint and separately consider a civil claim for unjust enrichment or damages against the account holder or the persons who participated in the fraud. Evidence Victims Should Preserve Delays in reporting may allow the funds to be transferred through multiple accounts, converted into cash, or exchanged for virtual assets. Rather than continuing to negotiate with the suspected offender, the victim should first consider reporting the matter and requesting that the relevant account be restricted. Important evidence may include: ▪️Bank transfer receipts, transfer dates, account numbers, and account holder names ▪️Text messages and conversations through KakaoTalk, Telegram, or other messaging services ▪️Screenshots of investment or trading platforms ▪️Requests for additional deposits, fees, or taxes ▪️Contracts, purchase orders, quotations, and business registration information ▪️Telephone numbers, social media accounts, and original files provided by the suspected offender Leaving a chatroom or replacing a mobile phone may make it difficult to preserve the original evidence. Victims should retain not only screenshots but also exported chat records, attachments, and original electronic files where possible. What If a Legitimate Business Account Is Frozen? A business may receive genuine payment for goods or services but still have its account reported as suspicious because the payment is connected to a broader fraudulent fund flow. Even when the underlying transaction was legitimate, restrictions on a business account may significantly affect payroll, supplier payments, and ordinary business operations. The account holder may raise an objection with the relevant financial institution or contact the National Police Agency’s Integrated Response Center for Telecommunications Financial Fraud at 1394. If the police determine that the account is unlikely to be connected to criminal activity, they may request that the financial institution lift the transaction restriction. A general statement that the payment came from a legitimate transaction may not be sufficient. The account holder should provide objective evidence demonstrating the commercial basis for receiving the funds. Relevant materials may include: ▪️Contracts and purchase orders ▪️Tax invoices, receipts, and payment records ▪️Delivery and receipt records ▪️Evidence showing that services were actually performed ▪️Communications with the customer or counterparty ▪️Records showing how the received funds were used ▪️Evidence explaining repeated or similar transactions If the account, debit card, password, or another means of account access was transferred or rented to another person, the matter may go beyond a simple transaction freeze and raise issues under Korea’s Electronic Financial Transactions Act. Similarly, withdrawing cash or transferring funds while knowing that the money was connected to a fraudulent scheme may result in an investigation for aiding and abetting fraud. The account holder should therefore organize the facts and supporting evidence from the earliest stage. Key Points for Responding to a Suspicious Account Freeze Victims of emerging phishing scams should report the incident promptly and preserve all transaction records and communications before the funds are transferred elsewhere. A person or business whose account has been frozen despite receiving legitimate payment should demonstrate the substance of the transaction and the lawful basis for receiving the funds through contracts, invoices, delivery records, and other objective evidence. Decent Law Firm assists clients with criminal complaints arising from emerging phishing scams, reviews potential avenues for recovering transferred funds, and advises account holders on objections to transaction freezes and related criminal investigations. This content is provided for general informational purposes only and does not constitute legal advice for any individual matter.
2026-07-20 -
Blogs
Repeat DUI Offenses in Korea: What to Check Immediately After a Nighttime or Weekend Traffic Stop
Driving under the influence cases in Korea often begin unexpectedly late at night, early in the morning, or over the weekend. For a person who has previously been convicted of a DUI-related offense, the potential consequences cannot be assessed solely by counting the number of prior incidents. The date on which the previous sentence became final, the blood alcohol concentration in the current case, whether an accident occurred, and the circumstances surrounding the alcohol test must all be reviewed. Statements made immediately after a traffic stop may later be compared with credit card records, CCTV footage, vehicle black box recordings, and other objective evidence. It is therefore important to avoid guessing about facts that are not clearly remembered and to preserve relevant evidence as early as possible. Key Points ▪️“Habitual drunk driving” is not a separate criminal offense under Korean law. It is a general term commonly used to describe repeated DUI conduct. ▪️Enhanced punishment may apply when a person commits another DUI-related offense within 10 years from the date a previous fine or more severe sentence became final. ▪️A repeat DUI case is assessed based on the previous conviction date, blood alcohol concentration, driving distance, accident history, refusal or obstruction of alcohol testing, and whether the new offense occurred during a suspended sentence. ▪️Alcohol test results, payment records, designated-driver call history, vehicle black box footage, and previous court records should be secured promptly. How Many DUI Offenses Are Considered “Habitual Drunk Driving”? Korean law does not define habitual drunk driving as an independent criminal charge based on a fixed number of offenses. Instead, the police, prosecutors, and courts consider the overall circumstances of the case, including: ▪️The date and details of previous DUI convictions ▪️The blood alcohol concentration in the current case ▪️The length of time between the previous conviction and the new offense ▪️The distance driven and the reasons for driving ▪️Whether a personal injury or property damage accident occurred ▪️Whether the driver refused or interfered with alcohol testing ▪️Whether the offense occurred during a suspended sentence or repeat-offender period A person should therefore not assume the likely punishment based only on how many times they remember being stopped for drunk driving. Enhanced Punishment for Repeat DUI Offenses Under Article 148-2 of the Korean Road Traffic Act, enhanced penalties may apply when a person who previously received a fine or more severe punishment for drunk driving, refusal of alcohol testing, or obstruction of alcohol testing commits another relevant offense within 10 years from the date the previous sentence became final. The applicable statutory penalties depend on the blood alcohol concentration. ▪️Blood alcohol concentration of at least 0.03% but below 0.2% Imprisonment for one to five years or a fine of KRW 5 million to KRW 20 million ▪️Blood alcohol concentration of 0.2% or higher Imprisonment for two to six years or a fine of KRW 10 million to KRW 30 million ▪️Repeat refusal or obstruction of alcohol testing Imprisonment for one to six years or a fine of KRW 5 million to KRW 30 million These are the statutory sentencing ranges. The actual sentence may vary depending on the timing and seriousness of previous offenses, the distance driven, whether an accident occurred, efforts to compensate victims, and measures taken to prevent another offense. Why Immediate Action Matters After a Nighttime DUI Stop A DUI investigation does not begin only when the driver attends a formal police interview. Information collected at the roadside may become part of the investigation from the moment the traffic stop occurs. The police may ask about: ▪️The amount of alcohol consumed ▪️The time drinking began and ended ▪️The time the person started driving ▪️The distance driven ▪️Whether an accident occurred ▪️Why a designated driver or alternative transportation was not used When a driver provides an estimated or speculative answer, the statement may later conflict with restaurant payment records, CCTV footage, telephone records, navigation history, or vehicle black box footage. In repeat-offense cases, it is particularly important to confirm the date on which the previous criminal sentence became final. The relevant date is not necessarily the date of the previous traffic stop or even the date of the judgment. Evidence to Secure After a DUI Stop The following materials should be preserved as soon as possible: ▪️Blood alcohol concentration results and the time of testing ▪️Restaurant, bar, or convenience store payment records ▪️The route taken before and during the drive ▪️Designated-driver call and cancellation records ▪️Telephone calls and text messages ▪️Vehicle black box footage ▪️The location of nearby CCTV cameras ▪️Previous DUI judgments and disposition records ▪️The police interview date and the investigating officer’s contact information Vehicle black box and CCTV footage may be automatically deleted or overwritten. Delayed evidence collection can therefore make it more difficult to verify the actual driving route and timeline. Conduct to Avoid After a DUI Stop A person should not change the amount of alcohol consumed, the time of drinking, or the driving timeline in an attempt to reduce the expected punishment. Inconsistent statements may cause the police or prosecution to question the credibility of the entire explanation. When a fact is not clearly remembered, it is generally preferable to review objective records before making a definite statement. A driver must also not consume additional alcohol or use substances for the purpose of interfering with the calculation or measurement of blood alcohol concentration. Such conduct may constitute a separate offense of obstructing alcohol testing under Korean law. Even where the driver intends to admit the DUI offense, attending a police interview without reviewing the relevant facts and documents may create additional risks. Statements concerning previous convictions, the reasons for driving, and the events leading to the traffic stop may later be considered in determining the sentence. Situations Requiring Early Legal Review Early legal advice may be particularly important in the following circumstances: ▪️The driver has a DUI conviction that became final within the previous 10 years ▪️Multiple DUI offenses occurred within a relatively short period ▪️The new offense occurred during a suspended sentence ▪️The blood alcohol concentration was particularly high ▪️A personal injury or property damage accident occurred ▪️The driver left the scene or is being investigated for failure to take necessary measures after an accident ▪️The driver refused an alcohol test ▪️The police allege that the driver interfered with alcohol testing ▪️The roadside statement differs from the actual sequence of events ▪️The driver is uncertain about the date or details of a previous conviction Where the previous criminal record is unclear, the relevant judgment and final conviction date should be confirmed before estimating the likely consequences of the new case. Preparing for a Police Interview in Korea During a police interview, the investigator may ask detailed questions beyond whether the driver admits operating a vehicle after drinking. Before attending the interview, the following matters should be organized: ▪️When and where the drinking took place ▪️The approximate amount of alcohol consumed ▪️Why the person decided to drive ▪️The time and distance of the drive ▪️Whether an accident occurred ▪️Whether any victim has been compensated ▪️Why a designated driver or public transportation was not used ▪️Details of previous DUI convictions ▪️The driver’s occupation and need to use a vehicle ▪️Specific measures taken to prevent another DUI offense Any explanation or sentencing material should be based on truthful and verifiable facts. Submitting exaggerated, inaccurate, or purely formal documents may undermine the credibility of the defense. Nighttime and Weekend DUI Assistance Decent Law Firm’s 24/7 Criminal Defense Team accepts urgent consultations involving repeat DUI offenses, nighttime traffic stops, and weekend police investigations. Our legal review may include: ▪️Confirming previous DUI convictions and final judgment dates ▪️Reviewing the blood alcohol concentration and testing procedure ▪️Examining whether an accident, departure from the scene, or test refusal is involved ▪️Preserving black box, CCTV, and payment records ▪️Preparing for the police interview ▪️Reviewing statements and written submissions ▪️Preparing mitigating evidence and recurrence-prevention materials ▪️Responding to criminal penalties and driver’s license sanctions A foreign national who is currently at a police station or has recently returned home after a late-night traffic stop should not simply wait for the formal interview date. The previous criminal record, roadside statements, immigration status, and available evidence may need to be reviewed from the beginning. Decent Law Firm provides legal assistance throughout each stage of the matter, including the initial police investigation, prosecution, criminal trial, administrative appeal, and litigation concerning the suspension or cancellation of a Korean driver’s license. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-07-15
