Is Crypto Referral Legal? Why Financial Authority Press Releases Are Not Enough
Following a recent press release by the Financial Services Commission (FSC), inquiries regarding the legality of crypto referral programs have increased significantly. Many businesses that use exchange referral codes for marketing, investment advisory services, or community operations are now concerned about potential violations of the Act on Reporting and Using Specified Financial Transaction Information (the “AML Act”).
However, the legality of crypto referral programs cannot be determined solely based on an FSC press release. In practice, legal assessments must take into account the statutory provisions of the AML Act, relevant court decisions, and investigative standards applied by law enforcement authorities.
The Meaning and Limitations of the FSC Press Release
In its press release, the FSC suggested that certain referral structures could constitute brokerage or intermediary activities involving virtual asset exchanges. It is important to note, however, that this position reflects an administrative interpretation, not a binding judicial ruling or settled legal doctrine.
When legal liability is at issue, courts ultimately determine—on a case-by-case basis—whether a specific referral structure satisfies the statutory elements of a regulated virtual asset service provider under the AML Act. Accordingly, it is legally inappropriate to conclude that all referral programs are unlawful based solely on regulatory commentary.
The Core Legal Issue Under the AML Act
Article 7 of the AML Act imposes reporting obligations on virtual asset service providers. The key question is whether a referral program goes beyond simple advertising or promotion and instead constitutes the business of brokering or intermediating the purchase, sale, or exchange of virtual assets.
In making this determination, authorities focus not on the mere use of referral codes, but on substantive factors such as whether the operator intervenes in transaction structures, influences investment decisions, controls the flow of funds, or effectively forces users to use a specific exchange. Absent these elements, referral activities are generally viewed as marketing rather than brokerage.
Guidance from Court Decisions and Investigative Practice
Court rulings and multiple non-indictment decisions indicate a consistent approach: referral programs are often characterized as marketing arrangements provided by exchanges, carried out based on users’ voluntary choices. Where the operator does not execute trades, handle customer funds, or mandate the use of a specific exchange, it is difficult to classify such activities as regulated virtual asset services.
In practice, investigative authorities tend to focus less on the existence of a referral program itself and more on whether it is combined with fraudulent conduct, unregistered business operations, or substantive involvement in investment decisions.
Key Considerations for Crypto Referral Businesses
That said, not all referral structures are risk-free. Legal concerns may arise where a business repeatedly promotes only a single exchange, excludes alternative options, or combines referral activities with investment guidance that materially affects users’ decisions. In such cases, the activity may be viewed as de facto brokerage or intermediation.
Ultimately, the legality of a crypto referral program depends not on its label, but on whether the overall business structure can be legally justified under the AML Act. Businesses that currently operate referral programs—or are considering implementing them—should carefully assess their structure before regulatory or investigative issues arise.
Decent Law Firm’s Digital Asset Team provides legal opinions on the compliance of crypto referral structures, evaluates AML Act risks, and assists clients in preparing for potential regulatory or investigative scrutiny.
Crypto referrals are not simply a question of “legal or illegal,”
but whether the structure can be clearly explained and defended under the law.
If you require a legal review of your crypto referral business model, consulting experienced legal professionals at an early stage can be a critical step in risk management.
