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Media CoverageCoin Exit Scam Delio Shifts Loss Responsibility to Users by Amending Terms and Conditions
Delio, a virtual asset deposit service currently on trial for the '2.5 billion won coin exit scam,' has been accused of secretly amending its terms and conditions to avoid responsibility for deposit losses, shifting the burden to users. Initially, the company attracted users by promising to guarantee the principal, but without notice, it altered the terms to make users responsible for any losses. Legal experts have pointed out that if the terms were changed in a way that disadvantages users, the revised terms should not be applied retroactively to existing users. According to the virtual asset industry on the 14th, Delio recently submitted its 'virtual asset deposit service terms and conditions' to the Seoul Bankruptcy Court, where its bankruptcy proceedings are underway. The last amendment to these terms was made in September 2022, and it includes a clause assigning the responsibility for deposit losses to users. Article 5, Clause 2 of the terms states that 'all responsibility for losses incurred from deposit products invested in at the user’s discretion shall be borne by the user.' (omitted) Legal experts criticized Delio for failing to uphold its moral responsibility as a virtual asset service provider. Typically, when financial institutions amend terms and conditions in a way that disadvantages users, they do not apply the changes retroactively to existing users. However, if a financial institution seeks the consent of users for the amended terms, even disadvantageous provisions may be applied retroactively, according to legal opinions. Pureun “Ian” Hong, managing partner of Decent Law Firm, stated, "Since Delio's deposit service terms were amended in a way that disadvantaged users, Delio should have sought user consent for those changes."
2024-08-14 ChosunBiz -
Media Coverage
Will a Path Open for Terra · Luna Coin Fraud Victims to Be Compensated?
As the extradition of Kwon Do-hyung, the key figure behind the Terra-Luna crash, to Korea approaches, victims are closely watching to see if the domestic compensation process will be expedited. Legal experts believe that if Kwon is tried in Korea, his expected sentence may be significantly lower than if he were tried in the U.S. However, there is also speculation that it may be easier for Kwon to reach settlements with victims during the trial process. (omitted) According to industry reports, the global damage from the Terra-Luna collapse is estimated to be around 50 trillion KRW, with about 200,000 domestic victims suffering losses of approximately 300 billion KRW. The Seoul Southern District Prosecutors' Office, which is investigating Kwon, has filed a claim for asset preservation based on the "Act on the Confiscation and Recovery of Corrupt Property," and the court has approved the preservation of about 233.3 billion KRW of Kwon's assets. Experts view Kwon's extradition to Korea as a positive development for victim compensation. Pureun “Ian” Hong, managing partner of Decent Law Firm, commented, "It is clear that Kwon will face criminal charges in Korea for fraud and violations of the Capital Markets Act, and most of the related proceedings, such as the bankruptcy trials of Terraform Labs Korea, will take place in Korea. Since Kwon will need to focus on compensating victims to receive a lighter sentence, this could put domestic victims in a somewhat more favorable position compared to overseas victims."
2024-08-04 Financial News -
Media Coverage
Nation’s First 'Virtual Asset Spot ETF' Listing in Progress
Efforts are underway to list virtual asset spot exchange-traded funds (ETFs) for Bitcoin, Ethereum, Solana, and Ripple in Korea. According to the financial investment industry on the 7th, PVR Group has submitted a business proposal to Busan Technopark, a public institution under Busan City, aiming to establish core projects and regulatory exemptions for the blockchain regulatory free zone. The key content includes the listing of virtual asset spot ETFs and trading of K-content tokens. Busan Technopark is responsible for managing major projects in the Busan Blockchain Regulatory Free Zone. Based on business proposals from 16 companies, including PVR Group, Busan City plans to hold a general meeting this month to discuss key projects and regulatory exemptions for the blockchain regulatory free zone. (omitted) Hyeonsu “Elliot” Jin, the managing partner of Decent Law Firm, specializing in virtual assets, commented, "If this is pursued as a regulatory sandbox project, it can move forward quickly because it's not about changing the law but allowing temporary, limited, and trial-based operations. Since investments will be made through securities firms and asset management companies, this could help popularize virtual asset investments while also having a positive impact in terms of security and skilled personnel."
2024-07-07 Asia Economy -
Media Coverage
Hooked by Promises of High Returns, Trapped by Endorsement Ads
Instagram is being exploited as a platform for various scams disguised as 'high-income side jobs.' According to the fraud information sharing website 'The Cheat,' the first report of an Instagram side job scam was registered in June 2020, four years ago. These scams led to 348 cases last year, and as of the 2nd of this month, 241 cases have already been reported this year. A representative from the Financial Supervisory Service (FSS) stated on the 14th, "Many scams involve using Instagram as a recruitment platform, luring victims to Telegram and then inducing them to transfer money under the guise of investment." (omitted) Accounts advertising promotional services and recruiting members for side jobs often either have a structure that generates no real income or exaggerate potential earnings. Pureun “Ian” Hong , managing partner at Decent Law Firm and a financial crime expert, explained, "Recently, most of the scam reports related to Instagram involve types such as proxy shopping scams." (omitted) While catching the perpetrators is the only solution, it is challenging to track them because they frequently change their Instagram accounts. The police handling the case involving Mr. Kim remarked, "It's difficult to identify the targets, so it's unclear how long the investigation will take." Attorney Hong pointed out, "Fraud investigations can take months, but for these types of scams, it takes even longer due to the difficulty in securing evidence and identifying the suspects. The problem is that in the meantime, the criminals can funnel the money elsewhere." He added, "We need to interpret the 'fraudulent use of accounts' defined under the Telecommunications Fraud Victim Compensation Act more broadly, rather than limiting it to voice phishing, to develop more practical methods for victim compensation."
2024-06-15 Kukmin Ilbo -
Media Coverage
CEO of Golden Goal Indicted and Arrested for 'Coin Fraud' Using Famous Football Figures
A fraudster who deceived people into believing that a famous former soccer player was involved in a coin business, swindling billions of won, has been brought to trial. According to the legal community on the 9th, the Bucheon District Office of the Incheon District Prosecutors' Office (headed by Chief Prosecutor Oh Gi-chan) indicted Kim, the CEO of 'Golden Goal (GDG),' on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and other charges, on the 15th of last month. Kim is accused of defrauding 3.246 billion won by falsely claiming that the Golden Goal Coin would generate more than three times the profit within three months if listed on a major cryptocurrency exchange, and even if not, promising to refund the investment between 2021 and 2022. (omitted) The Golden Goal Coin, promoted as part of a soccer blockchain platform, was listed on the Singapore-based global exchange MEXC in June 2022, but was soon delisted. They also recruited soccer players as promotional models to attract investments. However, due to a lockup (restricted trading), investors were unable to recover their funds, leading to suspicions of it being a 'scam coin.' Attorney Pureun “Ian” Hong of Decent Law Firm, who represents the victims, stated, "This case involves a large-scale organized crime operation that utilized influencers, and it is clear that no legitimate business was being conducted while they collected money from numerous people. There are likely more accomplices involved, and thorough investigations should be conducted to recover criminal proceeds and compensate victims until the full extent of the damages is addressed."
2024-05-09 Financial News -
Media Coverage
'Retirement Fund Investment Scam' Targets Even Elderly with Dementia
As the country approaches becoming a 'super-aged society,' fraud crimes targeting the elderly are on the rise. It is particularly alarming that victims in their 60s and older are being targeted for their retirement funds. With most transactions like investing and shopping now conducted online, the elderly, who often lack financial and digital literacy, are increasingly falling prey to cyber fraud, prompting calls for solutions. (omitted) Experts attribute this phenomenon to the gap between improved digital accessibility and the lack of education on cyber fraud prevention. Pureun “Ian” Hong, managing partner at Decent Law Firm, which specializes in new types of fraud cases, explained, "In the current era of high inflation, many elderly people are inclined to invest their retirement savings to prepare for their later years, but without proper education, they easily fall for scams. As traditional offline channels transition to contactless methods, the elderly are left with no choice but to engage in cyber-based investments such as stocks or virtual assets, making it clear that societal measures are urgently needed."
2024-05-03 Seoul Economy
