Decent Law Firm Warns: “Even ‘Simple’ Promotion and Referral Activities in Crypto Can Cross Legal Boundaries”
As the virtual asset market continues its integration into Korea’s formal regulatory framework, business models operating outside centralized exchanges—such as referral platforms, trading signal groups, and subscription-based chart analysis services—are increasingly affected by evolving regulatory scrutiny. Structures that were once widely perceived as mere promotional or content-based activities are now facing closer examination under the Act on Reporting and Using Specified Financial Transaction Information (the “AML Act”) and the Virtual Asset User Protection Act, particularly where they may be interpreted as constituting “business activities.”
Recently, Korean financial authorities have emphasized that regulatory risk does not arise solely from the provision of referral links themselves. Instead, greater attention is being paid to how users are induced to trade, how revenues are generated, and whether elements such as commercial intent, repetitiveness, and compensation are combined in a manner that may amount to brokerage, intermediation, or other regulated business conduct. As a result, industry participants increasingly recognize that regulatory assessments hinge less on a service’s name or outward appearance and more on its actual operational structure, fund flows, and contractual arrangements.
That said, not all referral-based structures or activities related to overseas virtual asset exchanges automatically qualify as “virtual asset service providers” subject to reporting obligations under the AML Act. Whether an entity falls within the scope of a regulated virtual asset service provider depends on a comprehensive assessment of its business model, transaction methods, and the degree of commerciality, compensation, and continuity involved. Consequently, both reporting obligations and potential violations may vary significantly by structure. In particular, referral-based crypto businesses remain an area where judicial precedent has yet to be clearly established. In practice, the prevailing view is that regulatory risk ultimately depends on how customers are attracted, how compensation is structured, and whether the overall operation can be characterized as continuous business activity.
Against this regulatory backdrop, Decent Law Firm has strengthened its structural advisory services for referral- and content-based crypto platform operators through its dedicated Virtual Asset Practice Team. Rather than focusing solely on categorical determinations of legality, Decent adopts a substance-over-form approach—analyzing regulatory exposure based on the actual operation of the business and providing integrated advice on corporate structuring, contractual frameworks, and tax arrangements to manage risk proactively.
In many referral-based businesses, revenues and commissions are often fragmented across individual operators or partner entities, leading to accumulated tax exposure. In addition, disputes frequently arise when incentives already paid cannot be recovered following refunds or chargebacks. Where terms of service, partner agreements, and settlement rules are inadequately structured, customer complaints or internal disputes may escalate into external audits or tax investigations. Decent addresses these structural vulnerabilities by diagnosing risks at an early stage and advising on the establishment of centralized corporate operating systems and internal control frameworks.
Managing Partner Attorney Jin Hyeonsu of Decent Law Firm commented, “The core issue in crypto referral businesses is not the referral format itself, but how the business is actually operated. If fund flows, contractual structures, or content operations are misaligned, tax, administrative, and even criminal risks can arise simultaneously. Post hoc explanations have clear limitations—designing a business structure from the outset with regulatory standards in mind is critical.”
Managing Partner Attorney Hong Pureun added, “Because referral-based crypto businesses remain an area without well-established judicial precedent, uniform conclusions of illegality are inappropriate. What is required instead is a structure-specific and type-specific analysis. Decent combines its virtual asset legal expertise with crypto-focused tax capabilities to deliver tailored legal opinions and structural advisory services suited to each client’s operational reality.”
As virtual asset regulations become increasingly detailed, many in the industry observe that it is no longer feasible to continue operating under legacy, informal structures. As regulatory standards are formalized, internal structures—rather than external branding—are becoming both a source of risk and a key competitive differentiator.
Decent Law Firm continues to expand the role of its Virtual Asset Practice Team, leveraging accumulated advisory experience in regulatory “borderline” areas such as referrals, trading signal groups, and crypto platforms. Through this expertise, Decent aims to serve as a legal partner that provides clear, predictable operational standards for businesses navigating regulatory uncertainty. The firm notes that “for companies currently operating or considering launching virtual asset–based businesses, now is the critical time to comprehensively review their structures and manage risk through professional legal and tax advisory services.”
