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Growing Scrutiny of MetaTrader-Based Overseas Futures Signal Businesses

MetaTrader 4 and 5 are trading platforms commonly used for overseas futures, FX trading, and CFDs, or contracts for difference.

The MetaTrader platform itself is not illegal. The legal risk arises from how the business is operated.

In Korea, issues may arise where an operator uses MetaTrader to run a trading signal room, copy trading service, or investment consulting business, while also directing users to a specific overseas broker and receiving referral commissions based on users’ trading volume.

In such cases, Korean investigative authorities may examine whether the business structure constitutes fraud under the Korean Criminal Act or a violation of the Financial Investment Services and Capital Markets Act, commonly referred to as the Capital Markets Act.
 

Applicable Laws

The statutory penalty for fraud under the current Korean Criminal Act is imprisonment for up to 20 years or a fine of up to KRW 50 million. However, the actual penalty range in a specific case may vary depending on the timing of the alleged conduct, the applicable version of the law, and whether multiple offenses are found to be in concurrence.

Fraud and violations of the Capital Markets Act are separate offenses with different legal elements and protected interests. Where both allegations are raised, the overall criminal exposure may increase depending on the scale of damage, business period, amount of referral revenue, and the specific role of the operator.
 

Fraud Issues Under the Korean Criminal Act

For fraud to be established in an investment-related case, there must generally be deception, mistake, a disposition of property, financial gain, and a causal relationship between these elements.

In MetaTrader-based signal or copy trading cases, investigative authorities may focus on whether the operator had the actual ability and intent to generate the profits represented to customers.

1. Ability to Generate Profits

Investigators may review the operator’s investment experience, trading record, risk management ability, and the explanations given to customers to determine whether the operator had an objective basis for the profits described.

If the operator claimed to be an expert despite limited investment experience, or used expressions such as “stable returns,” “principal guaranteed,” or “no-loss trading,” those statements may become important factors in assessing whether the customer was misled.

Overseas futures, FX, and CFDs are high-risk derivative products with significant volatility and potential for loss. Therefore, statements implying fixed or stable profits may be viewed unfavorably if they are inconsistent with the actual trading structure and risk profile.

2. Intent to Act in the Customer’s Interest

Another key issue is whether the operator genuinely intended to pursue the customer’s investment interest.

If the operator’s referral commission increased according to the customer’s trading frequency or trading volume, regardless of whether the customer made a profit or loss, investigators may question whether the operator prioritized referral income over the customer’s investment outcome.

For example, if a customer states that they would not have invested had they known that substantial trading fees and referral commissions would be generated, the failure to disclose that fee structure may be considered a form of deception by omission.
 

Issues Under the Capital Markets Act

1. Scope of Quasi-Investment Advisory Business

Under Article 101 of the Capital Markets Act, a quasi-investment advisory business generally refers to a business that provides non-individualized investment advice on financial investment products to an unspecified number of clients for consideration, through publications, communications, broadcasts, or similar means.

Paid investment advice provided through interactive channels such as KakaoTalk, Telegram, or open chat rooms may go beyond the permissible scope of quasi-investment advisory business and may be regulated as investment advisory business.

A quasi-investment advisory business registration alone does not generally allow the operator to provide specific one-on-one instructions to individual users, such as entry points, liquidation timing, stop-loss levels, or take-profit levels. Such conduct may raise issues of unregistered investment advisory business under Articles 17 and 445(1) of the Capital Markets Act.

2. Possible Unregistered Discretionary Investment Management Business

In a copy trading structure, if the operator uses a customer’s account, API access, or trading authority to substantially control the management of the customer’s assets, the business may be examined as a possible unregistered discretionary investment management business.

Discretionary investment management generally involves managing a client’s assets by making investment decisions on behalf of the client. If the operator goes beyond simply providing market information and effectively controls trading decisions and execution, the conduct may fall within the scope of regulated financial investment business.

3. Possible Unauthorized Investment Brokerage Business

If the operator actively directs users to a specific overseas broker, assists with account opening, deposits, or trade execution, and receives commissions in connection with that activity, the structure may raise issues of unauthorized investment brokerage business under Articles 11 and 444(1) of the Capital Markets Act.

Simply posting a link or introducing a broker does not automatically amount to investment brokerage. However, if the operator provides account-opening guidance, deposit instructions, trading education, product-specific recommendations, and receives referral commissions, Korean authorities may review the overall business structure to determine whether the operator was effectively engaging in regulated financial investment business.
 

Practical Response During an Investigation

In these cases, investigative authorities tend to focus on the operator’s ability, intent, disclosure practices, and the actual structure of referral compensation.

Because statements made during the early stages of an investigation may later become important evidence in court, it is important to review the legal structure of the business as soon as the operator is contacted by the police or another investigative authority.

Key issues to review include:

• Whether customers were properly informed of the risks of margin trading, leverage, forced liquidation, and fee structures
   
• Whether expressions such as “guaranteed profit,” “stable return,” or “principal guaranteed” were used
   
• Whether the current business model falls within the permissible scope of a quasi-investment advisory business
   
• How the referral commission structure is connected to customers’ trading volume, trading frequency, or investment performance

DECENT Law Office’s Digital Asset and Financial Investment Team advises on criminal and regulatory matters involving MetaTrader-based overseas futures signal services, copy trading structures, referral commission models, and related Capital Markets Act issues.

If you have received a criminal complaint, a police summons, or notice of a preliminary investigation, or if you wish to review whether your current business structure is legally appropriate under Korean law, it is important to first examine the specific facts and operational details of the business.