What is a coin referral?
Host: Han Chi-ho / Director of NBNTV Investment and Economic Research
Guest: Pureun “Ian” Hong / managing partner at Decent Law Firm
Q. First, shall we take a look at what a coin referral is?
- Referral marketing is a system where a third party introduces customers.
- When the third party signs up for the exchange, the referral code owner receives cryptocurrency rewards.
- New exchanges create codes for famous internet broadcasters for promotional purposes.
- By entering a "referral code," users receive transaction fee discounts.
Q. What are the issues with coin referral marketing?
- It is used in cryptocurrency investment internet broadcasts, raising concerns about encouraging high-risk investments to viewers.
- Some exchanges pay a portion of viewer losses to the broadcasters.
Q. Is there criminal liability in coin referral marketing?
- The conditions for establishing fraud (under Article 347 of the Criminal Act) are "deception" and "obtaining property or financial benefits."
- The key issue is whether the "deception" element is met.
- Referral marketing is recognized as a deceptive act if there is false or exaggerated advertising.
- “If the risks of the exchange are concealed during promotion, it constitutes fraud.”
- Under criminal fraud law, any referrer with Korean nationality is subject to domestic law punishment.
- “It is difficult to prove the intentional fraud in referral cases.”
Q. Can victims of coin referral marketing file civil lawsuits?
- Civil lawsuits related to referral marketing aim for “compensation for damages due to illegal acts.”
- Article 750 of the Civil Act states that a person who causes damage to another due to an unlawful act, either intentionally or negligently, is responsible for compensating that damage.
- The key in civil lawsuits is proving "intent or negligence."
- If referral marketing is conducted after recognizing internal issues of the exchange, winning a civil lawsuit is possible.
- Caution is needed regarding illegal referral practices.
