Decent Law Firm: “2025 Virtual Asset Investigations Intensify Across the Board… Pre-Compliance Checks on Business Structures Are Essential”
Analysis suggests that as of 2025, investigations into virtual asset crimes in South Korea have shifted to an "all-encompassing" enforcement regime. Authorities are moving beyond simple fraud cases to scrutinize the entire flow of funds, targeting investment signal groups (so-called “reading rooms”), referral structures, arbitrage trading utilizing the "Kimchi Premium," money laundering via stablecoins, and illegal foreign exchange transactions through unregistered overseas exchanges.
According to the Financial Intelligence Unit (FIU), Suspicious Transaction Reports (STRs) related to virtual assets have been steadily increasing since 2021. Data released by the Korea Customs Service and the Customs Border Control Training Center reveals that approximately 11.4 trillion KRW in illegal foreign exchange transactions was detected between 2021 and September 2024. Notably, about 83% of these transactions were analyzed to be illegal foreign exchange trades using virtual assets.
Decent Law Firm explained, "Investigative agencies are moving away from traditional fraud investigation methods and are now approaching cases by scrutinizing the entire investment structure and fund movement." The firm added, "Activities such as operating signal groups, referral schemes, exploiting the Kimchi Premium, and stablecoin-based illegal forex trading can all be linked to charges of fraud, violation of the Act on Regulation of Conducting Fund-Raising Business Without Permission (similar to Ponzi schemes), the Capital Markets Act, the Foreign Exchange Transactions Act, and the Act on Reporting and Using Specified Financial Transaction Information (AML regulations), depending on the actual flow of funds."
Focus on “Signal Groups” and Referral Systems One of the primary areas currently under scrutiny is "investment signal groups" based on Telegram or Open Chat rooms, as well as referral-based recruitment structures. A typical pattern involves recruiting investors with promises of high returns, inducing them to transfer funds to unregistered overseas exchanges or personal wallets, and operating based on referral fees. Authorities view that if this structure is combined with false or exaggerated advertising, it constitutes fraud. Furthermore, collecting investment funds from unspecified individuals may violate the Act on Regulation of Conducting Fund-Raising Business Without Permission, and if the operation involves investment advice or discretionary management, it could be deemed an unregistered investment advisory service.
Crackdown on Kimchi Premium Arbitrage Arbitrage trading exploiting the "Kimchi Premium" remains a target for enforcement. While the premium gap has narrowed in 2025, illegal arbitrage and foreign exchange attempts using it persist. In particular, collecting funds from third parties for repeated remittances or distributing profits using borrowed-name or corporate accounts can lead to charges under the Foreign Exchange Transactions Act, tax evasion, and money laundering.
Evolving Methods: Stablecoins and Illegal Forex Trading Methods for illegal foreign exchange transactions using overseas unregistered exchanges and stablecoins are becoming more sophisticated. Recently, investigators have uncovered cases of "coin-based illegal forex trading," where cash is received in Korea and an equivalent amount of Tether (USDT) is transferred to a third party abroad. This method is harder to detect than traditional dollar-based illegal forex trading and raises concerns about its use in large-scale money laundering.
Strengthened AML Regulations Simultaneously, Anti-Money Laundering (AML) regulations for domestic Virtual Asset Service Providers (VASPs) have been significantly tightened. The government is intensively monitoring exchanges, wallet services, and custody providers for compliance with STR obligations, the Travel Rule, and high-risk wallet blocking systems. There are increasing instances where failures in internal controls lead not just to administrative sanctions but to criminal liability.
Expert Advice: “Pre-Compliance is the Best Defense” Jin Hyeonsu, Managing Partner of Decent Law Firm, emphasized, "The era of operating a business hoping 'there won't be any problems' is over as of 2025." He advised, "From the initial business stage, companies must comprehensively review their fee structures, referral methods, investment solicitation procedures, contracts, terms of service, and fund flows." He further noted, "Defending legally after an investigation has already begun has its limits. Pre-compliance checks and structural design are the most realistic strategies for risk management."
Decent Law Firm operates a dedicated Virtual Asset Team and has accumulated extensive practical experience through successful early-stage defense cases—including non-indictment decisions and dismissal of arrest warrants—as well as regular legal advisory services for blockchain enterprises.
Experts advise that with 2025 marking a turning point where both criminal investigations and administrative regulations on virtual assets are being simultaneously strengthened, industry players must adopt a management strategy focused on "pre-check" rather than "post-response."
