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Media CoverageUnregistered Operator BTCC Engages in Illegal Activities Again: 'Korean Language Support and KRW Deposits Available'
It has been revealed that the unregistered virtual asset service provider (VASP) BTCC is promoting Korean language support and KRW transfers while proposing partnerships to domestic blockchain companies. On August 27, it was confirmed that BTCC sent an email to domestic blockchain company A on the afternoon of August 26, offering a partnership with BTCC, which supports the Korean language and accepts KRW deposits. (omitted) Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, pointed out, "KRW deposits, card usage, and bank account registration could potentially violate the Act on Reporting and Using Specified Financial Transaction Information (Special Act) and the Electronic Financial Transactions Act." Jin further stated, "Since BTCC has not obtained a business license under the Special Act, it seems clear that they are operating illegally." He added, "Since card companies block virtual asset payments, it's unlikely that payments will be processed normally, and there is a risk of involvement in money laundering through illegal means such as bypass payments."
2024-08-28 Digital Asset -
Media Coverage
Coin 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 -
Media Coverage
Advancement of investment fraud targeting the elderly
Investment fraud targeting the elderly is becoming more sophisticated. As digital accessibility among the elderly increases, their retirement funds are becoming increasingly vulnerable to new types of cyber fraud, leading to greater losses. According to police reports, the number of elderly victims aged 61 and older has risen from 34,359 in 2019 to 44,470 in 2023. In 2019, only 8.13% of scams targeting the elderly were cyber-related, but by 2023, this figure had increased to 25.71%. Experts warn that as the elderly engage more in online economic activities, their lower financial and digital literacy compared to other age groups makes them more susceptible to fraud by criminal groups. (omitted) Pureun “Ian” Hong, managing partner at Decent Law Firm, explained, "Seeing cases of people making profits from coins and stocks, many are jumping into investments. While younger people find it easy to purchase safer investments, like publicly traded coins, through apps, the elderly often struggle with this and end up being defrauded when they entrust others with the process." There has also been a consistent rise in cases where companies registered as similar investment advisory businesses evade the scrutiny of financial authorities and deceive vulnerable groups in the digital and financial space. While authorities are conducting large-scale crackdowns and a revision to the Capital Markets Act, which includes regulations on the scope and operation of similar investment advisory businesses, is set to take effect in July, the number of reported companies in this category reached 2,207 as of May 3, 2024, with 79 new registrations this year alone.
2024-05-03 Seoul Economy -
Media Coverage
[Interview with Attorney Pureun “Ian” Hong] Elderly Victims Increasingly Affected by Coin Fraud; Seek Expert Help if You Suspect Anything
"As the virtual asset market grows, related crimes are also on the rise. Criminal organizations are becoming more sophisticated, and to help victims, lawyers must continually upgrade their expertise." Attorney Pureun “Ian” Hong, the managing partner of Decent Law Firm (10th Bar Exam), is a specialist in virtual asset cases, including the fraud case involving the virtual asset deposit service company, Haru Invest. Hong's interest in virtual assets and blockchain stems from his university major. A graduate of the Korea National University of Arts' School of Drama, Hong developed an interest in non-fungible tokens (NFTs) as digital art even before Bitcoin became widely known. Attorney Hong categorizes virtual asset-related crimes into three main types: pyramid schemes, crimes involving the solicitation of investment funds, and crimes utilizing coins. Pyramid scheme-type fraud typically involves soliciting investments from the public under the guise of coins or other assets, even though there is no legitimate business venture, eventually leading to insolvency. Hong emphasized the need for caution, as the larger a coin-based business becomes, the higher the risk of fraud. He explained that even if a business appears legitimate at first, it can ultimately become a fraud if the business fails and enters a state of insolvency. "The virtual asset market often sees tens of thousands of people flocking to certain projects, lured by the hope of making a large profit with early investments," Hong said. "When these investments grow large and the business fails, investors can find themselves in a very difficult position. I am currently handling several pyramid scheme cases that promise daily returns of 2% along with coin rewards." The Haru Invest case, in which Hong represented the victims, is a representative example of a crime involving the solicitation of investment funds for a project. This criminal organization defrauded customers of approximately 14 trillion KRW in coins. "In the Haru Invest case, although there was a legitimate business item, the methods of fund solicitation and management were abnormal," he explained. "Fraudulent practices were used during the management process, making it similar to corruption or white-collar crimes." In addition to these cases, Hong also investigates incidents where virtual assets are used as tools for general crimes, such as drug trafficking or money laundering for criminal proceeds, including voice phishing. Hong noted a noticeable increase in the number of elderly victims in virtual asset-related cases. He analyzed that the elderly, who generally have less understanding of virtual assets, often suffer significant losses from even basic fraud schemes because they are easily lured by promises of high returns. He advised, "The general public should also approach virtual assets with a thorough understanding, as they are much more complex than the traditional financial system. Even after investing, it's crucial to continuously verify how the funds are being used. If there's any suspicion of fraud, it's important to consult with specialized attorneys." "I am committed to tackling challenging cases to build my skills and achieve my goals," Hong concluded. "I will continue to study a wide range of fields, deepening my expertise and acquiring diverse knowledge."
2024-04-28 Financial News -
Media Coverage
From voice phishing to coin-related crimes, financial fraud victims on the rise
Despite the economic downturn, the investment frenzy in virtual assets, stocks, and similar ventures continues, leading to an increase in cybercrimes using these investments as bait. Financial fraud schemes, once dominated by 'voice phishing,' have shifted to cyber environments, such as 'investment chat rooms,' resulting in a growing number of victims. (omitted) The surge in prices of virtual assets like Bitcoin and the skyrocketing value of IPO stocks, where quick investments can yield substantial returns, have been identified as reasons for the increase in cyber fraud crimes driven by a get-rich-quick mentality. Attorney Pureun “Ian” Hong from Decent Law Firm explained, "Many people fall victim to fraud after being influenced by stories of acquaintances who made large sums through actual coin investments. In some cases, this type of fraud spreads like a pyramid scheme, creating collective victims, and at times, victims themselves turn into perpetrators, requiring caution." Initially, the trend was to simply operate investment chat rooms and demand fees for investment guidance, but the scale of fraud has since grown with the creation of sophisticated fake investment applications. Furthermore, recently, small crime syndicates have been operating in a decentralized network structure, where different groups specialize in victim recruitment, money laundering, distribution of ghost accounts, and website development. This decentralized structure makes it easier for smaller groups to sever ties with the larger organization if they are caught, making it difficult for law enforcement to apprehend all the culprits involved.
2024-04-23 Seoul Economy -
Media Coverage
Key Focus of the Terra · Luna Trial: Whether They Qualify as Securities
The fallen 'Korean Elon Musk' is expected to return to Korea. This refers to Kwon Do-hyung, CEO of Terraform Labs, the developer of Terra and Luna coins. His extradition to Korea is expected to impact the ongoing trial. On the 7th, the Podgorica High Court in Montenegro overturned the previous decision to extradite Kwon to the U.S. and ruled for his extradition to Korea. (omitted) One of the key issues anticipated to be addressed during the trial following Kwon's extradition is whether Terra and Luna can be classified as securities. The determination of whether virtual assets are securities will affect the severity of the punishment, as recognizing them as securities could lead to charges under the Capital Markets Act. (omitted) The legal community expects that the determination of Terra and Luna's securities status will have an impact on other virtual assets. Hyeonsu "Elliot" Jin, an attorney at Decent Law Firm, specializing in virtual assets, stated, "It is highly likely that Kwon will be found guilty of fraud under the Special Act on Aggravated Punishment for Specific Economic Crimes. The key issue is whether there was a violation of the Capital Markets Act,' adding, 'Regardless of the outcome of the punishment, this could serve as a starting point for determining the securities status of virtual assets."
2024-03-18 Ilyosisa -
Media Coverage HOT
Foreign Coin Fraud Victims Struggle with Legal Challenges
More than 10,000 foreign investors are struggling with legal action after Haru Invest, a company that raised approximately 1.4 trillion KRW (around $1.1 billion USD) worth of cryptocurrency from numerous investors, suddenly suspended withdrawals. With foreign victims reportedly double the number of domestic ones, attention is focused on how the South Korean judicial authorities will proceed with the investigation. As of the 13th, according to representatives of foreign victims, out of the 16,347 individuals who entrusted their coins to Haru Invest, 11,313 are foreigners, with their damages estimated at over 1 trillion KRW. The victims hail from various countries, including the U.S., India, France, Finland, Australia, Iceland, Norway, Latvia, Ireland, and Switzerland. Law firms representing just a small fraction of these foreign victims have so far reported damages amounting to approximately 40 billion KRW. (omitted) Since Haru Invest is headquartered in South Korea and operated by offering returns to investors based on the condition of coin deposits, without involving any foreign cryptocurrency exchanges, any legal response must be pursued within South Korea. Hyeonsu “Elliot” Jin, Managing partner at Decent Law Firm, which represents some of the foreign victims, stated, “The Haru Invest case is not just a simple cryptocurrency scam in Korea, but a global issue with victims scattered worldwide. To restore the confidence of foreign investors, the South Korean judicial system must take active measures.”
2024-03-13 Seoul Economy
