Crypto Referral Marketing: Illegal Promotion Risks
Regulatory Boundaries Under Close Scrutiny by Financial Authorities
Crypto referral marketing is not always assessed as mere “simple promotion.”
Crypto referral activities are often perceived as nothing more than introductions or connection services. Many believe they are legally safe because they do not directly handle virtual assets and because the exchange itself is operated by a separate entity.
However, actual legal assessments may differ significantly from this perception.
Investigative authorities and courts focus not on labels or contractual form, but on the substantive function the activity performs within the transaction structure.
If the conduct goes beyond providing a simple link and instead induces trading participation or repeatedly and continuously encourages the use of a specific platform, such activity may be deemed to exceed the scope of mere promotion and qualify as virtual asset business activity under applicable law.
Key Factors in Determining Whether Crypto Referral Marketing Is Problematic
Whether a crypto-related marketing activity constitutes a reportable virtual asset business under the Act on Reporting and Using Specified Financial Transaction Information is determined through a holistic assessment, not a single criterion.
Authorities typically consider the following factors in combination:
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Existence of profit motive and the structure of revenue generation
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Whether economic benefits are linked to trading volume, performance, or number of registered users
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Whether the activity is repetitive and continuous (as opposed to a one-time act)
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Degree of direct or indirect involvement in user acquisition
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Whether the activity performs a substantive role in brokering, arranging, or facilitating virtual asset transactions
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Existence of human or physical business infrastructure
Individually, each factor may appear insignificant. However, when multiple elements are combined, the activity may be deemed a virtual asset business subject to reporting obligations under the law.
Common Misconceptions Regarding Crypto-Related Marketing Activities
A frequent misconception in practice is the belief that “because the exchange operator exists separately, I am merely an introducer.”
However, criminal and administrative liability is assessed based on the individual’s actual role and function, not the overall business structure (Seoul Southern District Court, Judgment dated December 5, 2024, Case No. 2024No1247).
Even where overseas exchanges or foreign entities are involved, if crypto-related marketing activities target users in Korea, the Act on Reporting and Using Specified Financial Transaction Information may still apply.
Moreover, modifying promotional language or altering contractual forms after an issue has been identified does not affect the legal evaluation of past conduct.
Article 17(1) of the Act provides that anyone who engages in virtual asset business activities without filing the required report may be punished by up to five years’ imprisonment or a fine of up to KRW 50 million. Post hoc formal changes alone are therefore insufficient to avoid liability for already committed violations.
What Should Be Reviewed Now in Crypto Referral Marketing Cases
Crypto referral marketing cases require simultaneous analysis of criminal liability, regulatory interpretation, and actual transaction structures.
Accordingly, Decent Law Firm provides early-stage legal support through the following approaches:
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Detailed classification of involvement by activity type and timeline
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Review of responsibility scope based on revenue structure and role allocation
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Preemptive assessment of criminal risk based on repetition and continuity
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Examination of Korean legal issues applicable even when overseas exchanges or structures are used
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Strategic restructuring and response planning prior to formal criminal determination
Crypto referral marketing cases are judged not by outcomes, but by legal risk potential.
For those already concerned about these issues, early review is often the most realistic way to reduce future exposure. How the structure is organized at the initial stage can significantly affect the eventual scope of liability.
