Legal Counsel for Cryptocurrency Investment Fraud Investigations
Police Investigation Stage: Key Issues, Defense Strategy, and Attorney’s Fees
Not all disputes arising from cryptocurrency investments lead to criminal prosecution.
Under Korean criminal law, fraud is established only where there is clear evidence that the accused had intent to deceive from the outset. Mere investment losses or business failure do not, by themselves, constitute criminal fraud.
In investigative practice, authorities tend to focus on cases involving patterns such as:
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Investment solicitations disguised as private sales,
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Guarantees of principal or fixed high returns, or
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Repeated promises of unrealistically high profits.
However, where actual investment execution took place and losses resulted from changes in market conditions, such cases may be more appropriately classified as civil disputes involving breach of contract, rather than criminal offenses.
Ultimately, police investigations into alleged cryptocurrency investment fraud revolve around two core issues:
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Whether there was intent to deceive at the time of solicitation, and
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How the invested funds were actually used.
Rights of a Suspect During a Police Investigation
A police investigation is not a procedural formality. It is a decisive stage that often determines whether a case proceeds to indictment and how subsequent criminal proceedings unfold.
A suspect is guaranteed the right to remain silent under the Constitution and the Criminal Procedure Act. There is no obligation to answer every question, particularly where the facts are unclear or where an answer may be unfavorable. Investigative authorities are legally required to inform suspects of this right.
In addition, a suspect has the right to assistance of counsel (Article 243-2(1) of the Criminal Procedure Act).
A defense attorney may assist from the pre-investigation stage, organize the direction of statements, attend police questioning, and intervene where questioning becomes improper or coercive.
In cryptocurrency-related cases—where transaction structures, wallet movements, and technical elements are complex—the involvement of counsel during questioning often plays a decisive role.
Where arrest or detention occurs, the suspect may request judicial review of its legality. Overnight interrogations and excessively long questioning sessions are strictly restricted by law.
Preparing for a Cryptocurrency Fraud Police Investigation
The most important step prior to appearing for questioning is a systematic organization of the facts.
Key materials may include:
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Cryptocurrency transaction histories,
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Investment agreements or offering documents,
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Communication records with investors, and
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Documentation tracing the flow and use of funds.
Consistency in statements is critical. Providing spontaneous answers while memories are unclear may result in inconsistencies that later work against the suspect during prosecution or trial.
Because written interrogation records are frequently treated as key evidence in court, any inaccuracies must be corrected immediately at the investigation stage.
If investigators attempt to induce unfavorable statements or apply undue pressure, the suspect should exercise the right to remain silent and seek immediate assistance from counsel.
Defense Strategy in Cryptocurrency Investment Fraud Cases
Defense in cryptocurrency investment fraud cases must be based on structure and evidence, not emotion or unsubstantiated assertions.
First, it is essential to demonstrate that actual investments were executed and that there was a genuine possibility of profit. This directly undermines allegations of deceptive conduct.
Second, evidence showing the absence of intent to misappropriate funds—such as partial profit distributions, operating expenses, or documented investment use—serves as a key factor in rebutting criminal intent.
Third, emphasizing the inherent volatility of cryptocurrency markets helps clarify that losses resulted from market risk rather than fraudulent conduct, reinforcing that the matter concerns civil liability rather than criminal responsibility.
The Supreme Court has consistently held that the mere failure to return investment funds does not, by itself, establish criminal fraud.
Why Early Legal Involvement Matters
Once a police investigation begins on suspicion of cryptocurrency investment fraud, the criminal process is already underway.
At this stage, early legal judgment and strategic involvement often determine whether a case proceeds to prosecution or concludes at the investigative level.
Decent Law Firm’s Digital Asset Practice Team designs defense strategies that go beyond abstract legal theory, taking into account investigative structure, fund flow analysis, and the technical characteristics of digital assets.
If you have received a police summons, it is critical to consult with legal counsel before appearing for questioning.
In cryptocurrency investment fraud cases, the investigation stage often determines the final outcome.
