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Media CoverageWill 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 -
Articles HOT
Reasons for Rejection of Haru Invest and Delio Rehabilitation Cases
Background of the Haru Invest and Delio Cases A year ago, during the major downturn in the cryptocurrency market, the Haru Invest and Delio scandals unfolded, leaving significant impacts on investors. While the market has since evolved, with Bitcoin and Ethereum entering mainstream finance through spot ETFs, these cases remain relevant in the legal landscape, particularly concerning rehabilitation and bankruptcy proceedings. Why Rehabilitation Was Denied Rehabilitation and bankruptcy cases receive less public attention compared to criminal trials. However, these processes are crucial for victims seeking to recover their losses. While criminal cases focus on punishing wrongdoing, rehabilitation and bankruptcy proceedings determine how the debtor's remaining assets can be distributed to creditors. Recently, the Seoul Bankruptcy Court rejected the rehabilitation applications for both Haru Invest and Delio, citing three key reasons, primarily aligned with Delio's case: Imminent Implementation of the Virtual Asset User Protection Act (Effective July 19, 2024): The Act mandates the separation of company and investor assets, a requirement Delio cannot meet due to the nature of its business. The court ruled that Delio’s inability to comply with this law renders its business operations infeasible post-rehabilitation. With only two current employees, Delio also lacks the capacity to pursue new ventures. Uncertainty of Business Success: Court-appointed investigators reported that Delio's prospects for success in either its existing or new business endeavors were highly uncertain. The company's structure incurs monthly expenses exceeding KRW 30 million, making continued operations unsustainable. Prolonged Asset Recovery Timeline: The court noted that rehabilitating Delio would result in dwindling resources due to ongoing operational costs, leaving less for creditors. Conversely, immediate bankruptcy would facilitate quicker distribution of assets to creditors, aligning with their best interests. Bankruptcy Proceedings and Asset Realization In corporate bankruptcy, when liabilities outweigh assets, a trustee is appointed to manage asset liquidation and creditor claims. This ensures fair distribution of the remaining resources before the company is dissolved. Key factors in these cases include how effectively trustees can recover assets, particularly cryptocurrency, which can be easily concealed through wallet transfers. Successful recovery often requires close collaboration with criminal investigations to track and seize concealed or misappropriated assets. Connection to Haru Invest and FTX During Haru Invest's criminal trial, prosecutors revealed that a significant portion of the lost assets was managed by B&S Holdings, which claims to have creditor claims against the bankrupt FTX exchange. This layered recovery process underscores the complexity and potential delays in compensating victims. Recommendations for Investors Investors in Haru Invest and Delio should monitor both the criminal proceedings at the Seoul Southern District Court and the bankruptcy cases at the Seoul Bankruptcy Court. Both avenues are critical in determining the ultimate recovery of their losses.
2024-07-06 블록미디어 -
Our News NEW
Recruitment of Attorney Minsun "Haley" Kang
Decent Law Firm is pleased to announce the addition of Attorney Mi-mi Kang, who brings exceptional expertise in e-sports, media content industries, and international legal matters. Attorney Haley has extensive experience gained from her tenure at CJ Powercast (CJ Olive Networks) and Loud Corporation, providing her with a profound understanding of the gaming and media content sectors. Additionally, she has built her legal expertise through her work at the Ministry of Justice, where she handled litigation approval involving the state and provided advisory support for national compensation lawsuits. Furthermore, leveraging her fluency in Japanese, Attorney Haley successfully handled complex international legal issues, including the successful application for provisional seizure of distribution revenue claims from Japanese record companies and providing legal opinions in collaboration with Japanese law firms. Representing Decent Law Firm, Senior Attorneys Elliot and Ian stated, "Attorney Haley's unique experience and specialized knowledge will significantly contribute to providing differentiated legal services to our clients. Moving forward, Decent Law Firm plans to continue recruiting talent with expertise in various fields to offer tailored legal services that reflect the specific needs of different industries." Decent Law Firm provides a broad range of legal services including corporate legal affairs, international law, civil and criminal litigation, and administrative matters. The firm is also expanding its legal services to cover specialized areas such as virtual assets, entertainment, and e-sports.
2024-07-01 -
Blogs HOT
The Need to Allow Virtual Asset Trading for Corporations and Foreigners
Current Situation of Virtual Asset Trading in Korea In Korea, virtual asset trading requires the use of real-name accounts linked to banks, following Know Your Customer (KYC) verification. Customers must deposit Korean won (KRW) into these accounts to trade virtual assets on exchanges. However, the current system imposes significant restrictions: Only one bank can be linked to a single exchange, preventing customers from using other banks for KRW deposits and withdrawals. Corporations and foreigners are prohibited from opening accounts on virtual asset exchanges, even though they can open bank accounts. This restriction is guided by financial authority policies but lacks clear legal justification. Legal Framework Supporting Corporate and Foreigner Accounts Under Korea's Act on Reporting and Use of Specified Financial Transaction Information (Specific Financial Information Act): Articles 5-2 (Customer Due Diligence) and 5-3 (Information Provision Obligations) presuppose that corporations and foreigners can open accounts for virtual asset transactions. Virtual asset service providers (VASPs) are classified as "financial institutions," but there is no legal basis for excluding corporations and foreign customers from opening accounts. This disparity between legal provisions and financial authority guidelines has created a practical bottleneck for businesses operating in Korea’s globally significant virtual asset market. Implications of the Ban Practical Challenges for Businesses Korean companies engaged in global virtual asset projects require corporate accounts for operational purposes. Due to the prohibition, many corporations manage virtual asset funds through personal accounts of representatives or financial officers. This practice: Blurs the distinction between personal and corporate funds. Increases the risk of embezzlement and other legal liabilities within the organization. Absence of Legal Justification While the Specific Financial Information Act supports the inclusion of corporations and foreigners as virtual asset customers, the prohibition by financial authorities: Lacks a clear legal foundation. Contradicts the intent of existing regulations designed to enhance transparency and compliance. Potential Negative Outcomes The ban drives corporations to seek alternative, less transparent methods of managing virtual assets. By not addressing the issues arising from this prohibition, financial authorities risk encouraging greater illegal activity, such as money laundering, rather than mitigating it. Recommendations Policy Revision Instead of an outright prohibition, financial authorities should adopt policies that address specific concerns, such as anti-money laundering (AML) and investor protection. Strengthen compliance requirements for corporate and foreign accounts rather than banning them altogether. Clear Regulatory Guidelines Establish transparent and consistent rules for corporations and foreigners wishing to engage in virtual asset trading. Enhanced Monitoring and Reporting Implement robust monitoring mechanisms to prevent misuse while ensuring legitimate corporate and foreign users can access virtual asset markets. Conclusion Banning corporate and foreign accounts for virtual asset trading does not address the root causes of potential risks and instead creates new problems, including internal legal liabilities and financial inefficiencies. Korea’s global role in the virtual asset market demands proactive and legally grounded solutions that balance compliance with economic innovation. The focus should shift from prohibition to regulation, ensuring the market's integrity while enabling fair access for all participants.
2024-06-19 X (Twitter) -
Blogs
Validity of Share Nominee Trust Agreements for Startups
What is a Share Nominee Trust Agreement? A share nominee trust agreement is a contract between the actual shareholder (trustor) and the nominal shareholder (trustee), where the external shareholding structure differs from the internal shareholding arrangement. Why Are Share Nominee Trust Agreements Created? Legal Restrictions: When ownership of shares is prohibited by law or other regulations. Privacy Reasons: To conceal share ownership for practical purposes. Industry Practices: To avoid potential management disputes by consolidating shares under one name while actual ownership is divided among multiple stakeholders. Are Share Nominee Trust Agreements Illegal? No, such agreements are not inherently illegal. Contracts are governed by the principle of freedom of contract, and there are no specific provisions penalizing share nominee trust agreements under the law. Are Share Nominee Trust Agreements Valid? The answer depends on the perspective: Internal Relationship (Trustor vs. Trustee): The agreement is valid. The trustee is bound by the contractual obligations outlined in the agreement, and the trustor can hold the trustee accountable for breaches. External Relationship (Trustee vs. Company): According to the Supreme Court, only the shareholder listed in the company’s shareholder registry is considered the legitimate shareholder. This means the nominee is recognized as the official shareholder in dealings with the company. Importance of a Well-Drafted Share Nominee Trust Agreement For startups, situations may arise where equity is divided among stakeholders but listed under the name of the founder or another nominee. In such cases, the drafting of the share nominee trust agreement is critical. The agreement must clearly define the rights and responsibilities of each party to avoid potential disputes. Key Provisions to Include in a Share Nominee Trust Agreement Clear Identification of Parties: Clearly define the trustor and trustee. Transfer Restrictions: Specify limitations on the transfer of shares. Shareholder Registry: Include clauses regarding the nominee’s entry in the shareholder registry. Liability and Damages: Outline provisions for compensation in the event of a breach. Termination of Agreement: Define the conditions and procedures for contract termination. Practical Note: The effectiveness of the agreement depends on its substantive content rather than its title or formal structure. Each provision must be carefully reviewed for legal enforceability. Relevant Case Law Supreme Court Decision 2013. 2. 14. (2011Da109708) Supreme Court En Banc Decision 2017. 3. 23. (2015Da248342) These rulings underscore the importance of properly drafted agreements and the distinction between internal and external validity in share nominee trust arrangements.
2024-06-17 X (Twitter)
