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BlogsA Practical Guide to Penalties for Unemployment Benefits Fraud
What Is Unemployment Benefits Fraud? Unemployment benefits fraud refers to receiving unemployment benefits through false or improper means despite failing to meet the eligibility requirements under the Employment Insurance Act. Article 61 of the Employment Insurance Act provides that payment of job-seeking benefits may be restricted for any person who has received, or attempted to receive, unemployment benefits through false or otherwise improper means. A wider range of conduct than many people expect may constitute fraudulent receipt. Common examples include the following. Failure to Report Employment or Reemployment This refers to cases where a person has been reemployed or has started part-time work but continues to receive unemployment benefits without reporting it to the employment center. Even a single day of work must be reported. Concealing Freelance or Part-Time Income This refers to cases where a person earns income but fails to report it, thinking, “It is not formal employment.” Freelance service fees, platform work income, and similar income are all subject to reporting obligations. False Reporting of the Reason for Separation This refers to cases where a person voluntarily resigned but falsely reports the separation as a recommended resignation, termination by employer, or expiration of contract. Because this is an intentional disguise designed to satisfy the requirements for unemployment benefits, it is treated particularly seriously. Receiving Benefits While Staying Overseas This refers to cases where a person receives unemployment benefits while staying overseas for an extended period during the benefit period, despite being required to engage in job-seeking activities. Failure to Report Opening a Business This refers to cases where a person registers a business or effectively begins operating a business but fails to report it. Penalties and Fines for Unemployment Benefits Fraud If fraudulent receipt is detected, the matter does not end simply by returning the money. In addition to civil recovery, criminal punishment may also follow. ① Full Repayment + Additional Collection of Up to Five Times the Amount Under Article 62 of the Employment Insurance Act, the full amount of the fraudulently received benefits must be returned. However, this is not the end. The Ministry of Employment and Labor may additionally collect up to twice the fraudulently received amount in cases of individual fraudulent receipt, and up to five times the amount where the recipient colluded with an employer. For example, if a person fraudulently received KRW 3 million on their own, they may be required to pay up to KRW 6 million in additional collection. If the person colluded with an employer, the additional collection may reach up to KRW 15 million. ② Criminal Punishment — Imprisonment or Fine Article 116 of the Employment Insurance Act provides that a person who fraudulently receives unemployment benefits may be punished by imprisonment for up to three years or a fine of up to KRW 30 million. However, where the fraudulent receipt was committed in collusion with an employer, the punishment is aggravated to imprisonment for up to five years or a fine of up to KRW 50 million. If the amount or method is serious, imprisonment may be imposed rather than a simple fine. The fact that a criminal record may remain should also not be overlooked. ③ Restriction on Future Eligibility If a person is caught fraudulently receiving unemployment benefits, their eligibility for future unemployment benefits may be restricted. This means that even if the person later becomes genuinely unemployed, they may face disadvantages in receiving benefits. How Is Fraudulent Receipt Actually Detected? Thinking “surely they won’t investigate me” is dangerous. The Ministry of Employment and Labor and the Korea Workers’ Compensation & Welfare Service detect fraudulent recipients through various channels. Data Matching with the National Tax Service and Four Major Social Insurance Systems This is the most common detection route. If income is reported to the National Tax Service or a four-major-insurance acquisition record appears during the unemployment benefit period, a mismatch is automatically detected. Even where the recipient was unaware, fraudulent receipt may be detected if the employer reported the person’s four-major-insurance enrollment. Reward System for Reports A reward system is in place for third parties who report fraudulent receipt of unemployment benefits. There are many cases where fraudulent receipt is detected through reports by coworkers, acquaintances, or even former employers. SNS and Card Transaction Records Investigations may begin where work-related posts are uploaded on social media during the benefit period or where business-related expenses are identified through transaction records. This route is particularly common in cases involving failure to report the opening of a business. Does Voluntary Reporting Make a Difference? If a person reports the issue voluntarily before being detected, the disadvantages may be significantly reduced. The Ministry of Employment and Labor provides benefits such as reduction or exemption of additional collection for voluntary reporters. Because additional collection may otherwise reach up to five times the fraudulently received amount, voluntary reporting may result in the matter being resolved in practice through repayment of the principal amount only. Voluntary reporting may also serve as a favorable sentencing factor when determining whether criminal punishment should be imposed. However, before making a report, it is advisable to first understand the amount to be repaid and the specific circumstances of the case. Lawyer’s Advice — If You Receive a Notice of Investigation When Can the Argument of “No Intent” Be Accepted? In unemployment benefits fraud cases, arguments such as “I did not know” or “I had no intent” are more difficult to have accepted than many people expect. Because employment centers expressly inform applicants of their reporting obligations when applying for benefits, it is difficult to deny intent merely by claiming ignorance. However, intent may be denied, or the circumstances may be reflected favorably in sentencing, in cases where the employer unilaterally enrolled the person in the four major social insurance systems, where the income from short-term part-time work was extremely small, or where there was a genuine misunderstanding about the scope of the reporting obligation. If You Receive a Summons or Investigation Notice Once you receive a notice of investigation from the Ministry of Employment and Labor or the police, responding alone can be risky. This is because your statements may directly affect the level of criminal punishment. Before attending an investigation, it is important to consult a legal professional and review the direction of your statements and whether voluntary reporting is appropriate. If you are under investigation for unemployment benefits fraud or have been contacted by the Ministry of Employment and Labor, please contact Decent Law Firm before it is too late. Our labor and criminal law teams will review your case and guide you toward the best possible response.
2026-06-18 Naver Blog -
Blogs
Overseas Futures Trading Lawyer: What You Need to Know Before an Investigation Begins
Why Domestic Promotion of Overseas Futures and FX Margin Trading Can Be Problematic Trading overseas futures or FX margin products is not, in itself, completely prohibited under Korean law. The issue arises when individuals or entities provide brokerage-related services or facilitate such trading activities within Korea without the required authorization. Under the Financial Investment Services and Capital Markets Act ("Capital Markets Act"), any person engaging in the business of trading, brokerage, or intermediation of financial investment products must obtain authorization from the Financial Services Commission. Overseas futures and FX margin products are classified as derivatives under the Capital Markets Act. Depending on the manner and extent of a person's involvement, different offenses and penalties may apply. For example, legal issues may differ depending on whether a person: Assists clients in opening accounts on overseas platforms such as MT4 or MT5; Operates a trading signal or "copy-trading" community; Receives and manages client funds directly. Case Study: “I Only Helped Connect People to the Platform” Mr. A had traded overseas futures for several years and built a track record of profitable trading. As his results became known among acquaintances, several people expressed interest in participating. Mr. A began assisting them with MT5 account registration and deposit procedures. He later operated a KakaoTalk group chat and Telegram channel where he provided real-time trading signals and received monthly subscription fees from members. Mr. A believed that he was merely providing information because each customer opened and managed their own account. His position was simple: "The investment decisions were made by the customers themselves." However, he eventually received notice that he had become the subject of a Financial Supervisory Service (FSS) investigation, which later developed into a criminal investigation. Investigators concluded that Mr. A's conduct went beyond merely providing market information. They focused on the fact that he continuously communicated with members in real time and repeatedly instructed them on entry and exit points for trades in exchange for compensation. When evidence emerged suggesting direct involvement in certain members' trading accounts, the allegations became significantly more serious. Why “Providing Information Only” Can Still Lead to Violations of the Capital Markets Act This is where many people misunderstand the legal risks. As involvement becomes more substantial, the potential offenses become more serious. Investigators typically focus on factors such as the following: Commercial Nature of the Activity Did the operator repeatedly collect fees while promoting services to the general public? → Potential issue: Violation of regulations governing quasi-investment advisory businesses Interactive Communication Did the operator provide individualized trading recommendations through open chat rooms, Telegram channels, or similar platforms? → Potential issue: Unregistered investment advisory business Automated Trading Execution Did the operator use API integrations or copy-trading systems that automatically replicated trades for clients? → Potential issue: Operating an investment discretionary management business without registration Involvement in Client Funds Did client funds pass through the operator's accounts, or did the operator directly participate in the trading process? → Potential issue: Unauthorized investment brokerage business Since August 2024, Korean regulations have prohibited quasi-investment advisory businesses from operating interactive communication channels with subscribers. This is one reason why the argument that someone was "only providing information" may no longer be persuasive from the outset. Additional Charges Such as Illegal Fundraising and Fraud May Also Apply If investors were recruited using representations such as: "Guaranteed monthly returns" "No risk of principal loss" "Guaranteed profits" additional criminal liability may arise under the Act on the Regulation of Conducting Fund-Raising Business Without Permission. This law prohibits raising funds from an unspecified number of individuals while promising repayment of principal, interest, or other guaranteed returns without proper authorization. Where an operator attracts investors through a trading signal service or investment community while emphasizing guaranteed profits, authorities may pursue multiple charges simultaneously, including: Violations of the Capital Markets Act; Violations of laws regulating unauthorized fundraising activities; Fraud. For example, in 2025, the Gyeonggi Nambu Provincial Police Agency arrested 28 individuals accused of raising approximately KRW 140 billion from more than 2,400 investors by claiming they would generate profits through FX margin trading. Authorities reportedly applied charges including fraud, illegal fundraising, and violations of the Door-to-Door Sales Act. This illustrates why overseas futures and FX margin trading cases rarely involve only a single allegation. What to Review If You Have Been Contacted by Investigators If any of the following situations apply to you, legal review before questioning may be advisable: ▪ Providing paid overseas futures or FX margin trading signals through Telegram, KakaoTalk, or similar platforms; ▪ Assisting clients with MT4, MT5, or similar platform account openings while receiving commissions or referral fees; ▪ Operating copy-trading services using clients' API keys or automated trading systems. Depending on the specific facts, authorities may allege: Violations relating to quasi-investment advisory businesses; Unregistered investment advisory activities; Unregistered investment discretionary management services; Unauthorized investment brokerage; Illegal fundraising activities; Fraud. The direction of statements made during the early stages of an investigation can significantly influence the development of the case. Understanding the legal structure of the allegations before attending an interview is therefore critical. The Digital Asset Practice Team at Decent Law Firm regularly advises individuals and businesses involved in investigations concerning unauthorized overseas futures and FX margin trading activities. If you have been contacted by investigators or have already been scheduled for questioning, it is important to understand the nature of the allegations and the overall structure of the case before appearing for an interview.
2026-06-17 Naver Blog -
Blogs
Need Compensation for an Investment Scam?
Does Any of This Sound Familiar? ✔️ Cryptocurrency / Virtual Asset Scam Patterns You were invited to a high-return crypto investment group through social media or an open chat room. After making a small initial investment, you actually received profits. Once you invested more money, withdrawals suddenly became unavailable. The person in charge disappeared, or the investment platform itself vanished. ✔️ Stock Recommendation Service Scam Patterns It started as a free stock recommendation service. You initially made profits from recommended stocks. You were encouraged to join a VIP group or paid service. After paying hundreds or even thousands of dollars in fees, your losses continued to grow. If any of the above applies to you, there is a significant possibility that you have been the victim of investment fraud. Before blaming yourself, consider whether legal remedies may be available. Why Compensation May Be Possible — Legal Grounds Many victims ask: "I've already transferred the money. Can I still recover it?" In many cases, the answer is yes. Criminal Complaint (Fraud Investigation) Filing a criminal complaint can initiate an official investigation and enable law enforcement authorities to trace bank accounts and investigate criminal proceeds. In addition, asset-freezing measures such as preliminary attachment orders or payment suspension procedures under applicable financial fraud regulations may help prevent the dissipation of assets. Civil Damages Claim Victims may also pursue the return of their losses through civil litigation, either independently or alongside criminal proceedings. Where multiple individuals participated in the fraud, all participants may be held jointly liable under the principle of joint tort liability. This means that victims may seek recovery of the full amount of their losses from any one of the responsible parties. Furthermore, since the implementation of South Korea's Virtual Asset User Protection Act on July 19, 2024, the legal framework for responding to virtual asset-related fraud has become stronger than before. Why Legal Representation Matters Recovering losses from investment scams is difficult not because victims lack knowledge of the law, but because fraudsters deliberately conceal their tracks. Fraud organizations often: Split funds across multiple accounts Operate through multiple entities or shell companies Launder proceeds through virtual assets and overseas platforms As a result, a simple complaint or basic police report is often insufficient to uncover the full structure of the scheme. Even when a case is formally reported, investigations may end with "suspect unknown" or "insufficient evidence" unless the case is properly supported. Effective recovery efforts often require: Early evidence preservation strategies (chat records, bank transfers, platform screenshots, etc.) Experience working with virtual asset exchanges and tracing transactions Coordinated group actions involving multiple victims The ability to pursue both criminal and civil proceedings simultaneously Without an experienced virtual asset litigation team, navigating these processes can be extremely challenging. What Makes Decent Law Firm Different Decent Law Firm operates a dedicated team focused on virtual asset disputes and investment fraud cases. Attorneys who understand cryptocurrency exchanges, blockchain transactions, and digital asset investigations approach these cases from an entirely different starting point. Our Experience Includes: Cooperation with virtual asset exchanges and regulatory authorities Simultaneous criminal and civil recovery strategies Representation of groups of victims in collective actions Development of evidence preservation and recovery strategies tailored to victims In investment fraud cases, time is critical. The longer the delay, the greater the risk that assets will be dispersed and evidence will disappear. Prompt action can significantly improve the likelihood of recovery. One Thing You Should Do Right Now Preserve Your Evidence. Keep any materials you still have, including: KakaoTalk or messaging app conversations Bank transfer records Screenshots of investment platforms or applications Wallet addresses and account information Contact details of the individuals involved Even if the other party has disappeared, and even if the platform no longer exists, legal options may still be available. The sooner action is taken, the better the chances of protecting your rights and recovering your losses.
2026-06-16 Naver Blog -
Blogs
Accomplice Liability in Drug Cases Involving Privacy Coins: Dark Coins, Crypto Payments, and Investigation Risks in Korea
Why Are Privacy Coins Used in Online Drug Transactions? Monero (XMR), Zcash (ZEC), and similar assets are commonly referred to as privacy coins or “dark coins.” Unlike Bitcoin or Ethereum, where transaction records are generally visible on public blockchains, Monero is designed to make it difficult to identify the sender, recipient, and transaction amount through technologies such as ring signatures and stealth addresses. For this reason, Monero and other privacy-focused assets are sometimes used in online drug transactions, including transactions arranged through Telegram, dark web forums, and social media platforms. However, the fact that a transaction is difficult to trace does not mean that it is beyond the reach of law enforcement. Korean investigative authorities do not rely solely on on-chain transaction data. They may also review Telegram messages, mobile device forensic data, statements from sellers and buyers, exchange records, fiat conversion history, and other evidence to identify those involved in the transaction. In other words, privacy coins may make an investigation more complex, but they do not make an investigation impossible. Key Korean Laws That May Apply In drug-related cases involving privacy coins, multiple laws may apply depending on the person’s role and level of involvement. Legal Basis Main Conduct Covered Possible Penalty Narcotics Control Act, Article 60(1)2 Sale, brokerage, receipt, possession, or use of certain psychotropic substances, including substances classified under Schedules B or C Imprisonment for up to 10 years or a fine of up to KRW 100 million Narcotics Control Act, Article 58(1)3 Manufacturing, import/export, sale, brokerage, receipt, or possession for such purposes of Schedule A psychotropic substances Life imprisonment or imprisonment for at least 5 years Act on Reporting and Using Specified Financial Transaction Information Operating a virtual asset business without the required VASP registration Imprisonment for up to 5 years or a fine of up to KRW 50 million Act on Regulation and Punishment of Criminal Proceeds Concealment Concealing or disguising proceeds from drug-related crimes Imprisonment for up to 5 years or a fine of up to KRW 30 million Even if a person did not directly sell or possess drugs, liability may still arise if they connected buyers and sellers, facilitated payment flows, exchanged virtual assets, or helped conceal criminal proceeds. In addition, if a person operates an over-the-counter (OTC) virtual asset service without proper registration and the service is used to process drug-related funds, separate issues may arise under Korea’s anti-money laundering and virtual asset regulations. The applicable law and potential penalty will depend on the type of substance involved, the exact conduct, whether the conduct was repeated, whether any compensation was received, and whether the person knew or should have known the criminal nature of the transaction. Crypto-Related Drug Investigations Are Expanding in Korea Drug transactions in Korea are increasingly moving from offline channels to online platforms such as Telegram, dark web marketplaces, and social media. According to media reports citing Korean police data, from January to April 2026, 9.2% of all drug offenders were reported to have used virtual assets. This was higher than the annual figure of 8.4% recorded in the previous year. The proportion of online drug offenders has also continued to rise. Media reports indicate that the figure increased from 24.0% in 2021 to 42.0% during the January–April 2026 period. Korean authorities are also strengthening their investigative infrastructure. In 2026, the Ministry of Science and ICT and the Korean National Police Agency began promoting a project to develop an integrated investigation system linking dark web activity, virtual asset transaction tracing, and online drug advertisement monitoring. The police have also established dedicated virtual asset investigation teams in major regional police agencies, including Seoul, Busan, Incheon, Gyeonggi Nambu, and Gyeongnam. As a result, crypto-related drug investigations in Korea are no longer limited to the question of whether a coin transaction can be traced on-chain. Investigators may analyze online communications, wallet and exchange records, fiat conversion records, device forensics, transaction patterns, and statements from co-suspects together. Using a Privacy Coin Does Not Prevent Accomplice Liability In a Korean drug investigation, the key issue is not simply the payment method. The more important question is how the person was involved in the drug transaction. The Narcotics Control Act does not only punish direct sales. It may also punish inducement, solicitation, brokerage, receipt, possession, use, importation, and manufacturing, depending on the substance and conduct involved. For example, methamphetamine is generally treated as a Schedule B psychotropic substance under Korean law. If a person sells, brokers, receives, possesses, or uses methamphetamine, Article 60(1)2 of the Narcotics Control Act may apply, which provides for imprisonment of up to 10 years or a fine of up to KRW 100 million. If the case involves importation or manufacturing of methamphetamine, a more serious provision may apply. Under Article 58(1)6 of the Narcotics Control Act, manufacturing or importing/exporting certain Schedule B psychotropic substances may be punishable by life imprisonment or imprisonment for at least 5 years. This means that the applicable charge can vary significantly depending on whether the conduct involved simple use, possession, sale, brokerage, aiding and abetting, importation, or manufacturing. Therefore, if you are contacted by Korean law enforcement, the first question should not be “Which coin was used?” but rather “What specific charge is being investigated?” Why “I Only Introduced the Parties” May Not Be Enough In many cases, suspects say: “I did not sell the drugs myself.” “I never touched the drugs.” “I only shared a Telegram link.” “I only helped connect two people.” However, Korean drug laws do not only target the final seller. If a person connects a buyer and a seller, directs someone to a sales channel, shares sales posts, helps arrange payment, or receives a commission after the transaction, the conduct may be viewed as brokerage or aiding and abetting. The following circumstances may increase legal risk: Repeatedly sharing Telegram channel links Connecting potential buyers to sellers Receiving a commission after a transaction Receiving the commission in Monero or another virtual asset Maintaining repeated contact with buyers or sellers Being named in a statement by an arrested seller or buyer In particular, receiving compensation in a privacy coin may be interpreted as an attempt to avoid detection. As a result, saying “I only introduced the parties” may sometimes help explain limited involvement, but it can also be used as evidence that the person knowingly participated in the transaction structure. What Evidence Do Korean Investigators Review? In privacy coin drug cases, Korean investigators generally do not rely on blockchain data alone. They may review the following types of evidence. First, they may review Telegram, KakaoTalk, Discord, or other messaging records. Even if the server is located overseas, messages, deleted data, files, images, contact information, and login records may be recovered through forensic analysis if a mobile phone or computer is seized. Second, they may rely on statements from co-suspects. If a seller or buyer is arrested first, the person may identify intermediaries, brokers, or payment facilitators during questioning. In that situation, even someone who was not present at the actual transaction may become a suspect. Third, they may review virtual asset and exchange records. Even if the privacy coin itself is difficult to trace, exchange registration records, deposit and withdrawal history, fiat conversion records, and transactions involving other virtual assets may still be reviewed. Fourth, they may assess repetition and compensation. A one-time message may be viewed differently from repeated introductions, repeated sharing of sales channels, or commission-based involvement. Whether the person received payment can significantly affect how the conduct is characterized. Before attending an interview, it is important to distinguish between what the investigators may already have and what the person’s actual role was. What to Check Before Attending a Police Interview If you are contacted by Korean law enforcement, it may be risky to immediately state, “I did not know,” or “I did not sell anything.” Early statements are later compared with police interview records, seized digital evidence, forensic results, and statements from co-suspects. If your statement changes or conflicts with other evidence, even limited involvement may be interpreted more unfavorably. Before attending an interview, you should check: The specific charge listed in the summons or notice Whether you are being treated as a suspect or a witness Whether your phone, computer, or other device has been seized The scope of Telegram, KakaoTalk, Discord, or other message records Whether any virtual asset wallet or exchange account was used Whether any seller or buyer has already been arrested Whether any commission or payment was received Whether there is evidence of repeated introductions or referrals Depending on these facts, the case may remain a witness interview, or it may develop into a full criminal investigation involving brokerage, aiding and abetting, or other drug-related charges. Once an interview date is scheduled, it is important to prepare a clear and consistent statement strategy in advance. Early Legal Response Matters in Privacy Coin Drug Investigations Using Monero or another privacy coin does not mean that a person is safe from investigation. Korean authorities are increasingly analyzing online drug transactions through Telegram records, virtual asset transaction structures, exchange and fiat conversion records, forensic evidence, and statements from co-suspects. In drug cases, the applicable law and penalty can vary significantly depending on whether the allegation involves use, possession, sale, brokerage, aiding and abetting, importation, or manufacturing. How you explain your role in the transaction, whether you received compensation, and how you respond to digital evidence and co-suspect statements may affect the direction of the case. Decent Law Firm’s criminal defense team assists clients in drug investigations involving virtual assets, digital forensic issues, and alleged accomplice liability. If you have received a police summons in Korea in connection with Monero, privacy coins, Telegram drug transactions, or virtual asset payments, it is important to review your situation before attending the interview. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-15 Naver Blog -
Blogs
Why You Should Never Ignore Interest and Criminal Liability for Unpaid Severance Pay
If you are delaying severance payments because “the company is facing financial difficulties” or “we are still discussing payment with the former employee,” you need to review your legal obligations immediately. Once 14 days have passed after an employee's resignation, both statutory interest and potential criminal liability may begin to accrue. When Must Severance Pay Be Paid? Under Article 9 of the Korean Employee Retirement Benefit Security Act, severance pay must be paid within 14 days from the employee's date of retirement. In exceptional circumstances, the payment deadline may be extended by agreement between the employer and the employee. However, even where the payment deadline has been extended by agreement, legal liability may still arise. Moreover, an agreement extending the payment date does not automatically resolve issues relating to delay interest, which requires separate legal consideration. Interest on Unpaid Severance Pay Can Be Significant If severance pay remains unpaid beyond the 14-day statutory period, delay interest accrues from the following day at an annual rate of 20% under Article 37 of the Korean Labor Standards Act and Article 17 of its Enforcement Decree. This rate is approximately four times higher than the general statutory civil interest rate of 5% per annum. Example KRW 30,000,000 (Severance Pay Principal) ↓ + KRW 6,000,000 (Delay Interest After One Year) Even if the parties agree to extend the payment deadline, delay interest is not automatically waived, and the longer the dispute continues, the greater the financial burden becomes. An extension agreement alone does not eliminate delay interest unless there is a separate legal basis supporting such waiver. Can Employers Actually Be Criminally Prosecuted? Yes. Failure to pay severance pay may constitute a criminal offense punishable by up to three years' imprisonment or a fine of up to KRW 30 million under Article 44 of the Employee Retirement Benefit Security Act. This is not merely an administrative violation—it may result in a criminal record. When a complaint is filed, a labor inspector from the Ministry of Employment and Labor will investigate the facts. If the employer is found to have intentionally avoided payment or lacked any genuine intention to pay, the case may be referred to prosecutors for criminal proceedings. Particularly where multiple employees at the same workplace have not received severance payments, authorities may view the conduct as intentional, increasing the likelihood of prosecution. What Should You Do Now? 1. Pay Immediately If Possible Even a partial payment may help demonstrate good faith and may be viewed favorably when assessing intent. 2. If Full Payment Is Not Possible, Execute a Written Installment Agreement Verbal agreements are difficult to prove in the event of a dispute. A properly documented written agreement can help reduce future conflicts and clarify the payment schedule. 3. Seek Legal Advice Early if a Complaint Has Been Filed or an Investigation Has Begun Statements made during a labor investigation can directly affect subsequent criminal proceedings. Establishing an appropriate legal strategy from the outset is critical. Time Is Not on the Employer's Side The longer severance pay remains unpaid, the more unfavorable the situation becomes for the employer. Interest continues to accumulate, and disputes tend to escalate. Obtaining accurate legal advice at an early stage can ultimately reduce both financial exposure and legal risk. At Decent Law Firm, we assist employers with labor investigations, criminal complaints relating to unpaid severance pay, and dispute resolution strategies. Before the situation worsens, consider obtaining legal advice as early as possible.
2026-06-11 Naver Blog -
Blogs
Criminal Risks for MetaTrader-Based Overseas Futures Signal and Copy Trading Operators in Korea
Growing Scrutiny of MetaTrader-Based Overseas Futures Signal Businesses MetaTrader 4 and 5 are trading platforms commonly used for overseas futures, FX trading, and CFDs, or contracts for difference. The MetaTrader platform itself is not illegal. The legal risk arises from how the business is operated. In Korea, issues may arise where an operator uses MetaTrader to run a trading signal room, copy trading service, or investment consulting business, while also directing users to a specific overseas broker and receiving referral commissions based on users’ trading volume. In such cases, Korean investigative authorities may examine whether the business structure constitutes fraud under the Korean Criminal Act or a violation of the Financial Investment Services and Capital Markets Act, commonly referred to as the Capital Markets Act. Applicable Laws Allegation Applicable Law Statutory Penalty Inducing investment through deception Article 347 of the Criminal Act, Fraud Imprisonment for up to 20 years or a fine of up to KRW 50 million, based on the current provision as of the publication date Conducting unregistered investment advisory or discretionary investment management business Articles 17 and 445(1) of the Capital Markets Act Imprisonment for up to 3 years or a fine of up to KRW 100 million Conducting unauthorized investment brokerage business Articles 11 and 444(1) of the Capital Markets Act Imprisonment for up to 5 years or a fine of up to KRW 200 million Paid one-on-one or interactive signal services beyond the scope of quasi-investment advisory business Articles 17 and 445(1) of the Capital Markets Act Imprisonment for up to 3 years or a fine of up to KRW 100 million Improper business conduct by a quasi-investment advisory business operator Article 101-2 of the Capital Markets Act and related provisions Administrative sanctions, including administrative fines, inspections, and possible cancellation of registration The statutory penalty for fraud under the current Korean Criminal Act is imprisonment for up to 20 years or a fine of up to KRW 50 million. However, the actual penalty range in a specific case may vary depending on the timing of the alleged conduct, the applicable version of the law, and whether multiple offenses are found to be in concurrence. Fraud and violations of the Capital Markets Act are separate offenses with different legal elements and protected interests. Where both allegations are raised, the overall criminal exposure may increase depending on the scale of damage, business period, amount of referral revenue, and the specific role of the operator. Fraud Issues Under the Korean Criminal Act For fraud to be established in an investment-related case, there must generally be deception, mistake, a disposition of property, financial gain, and a causal relationship between these elements. In MetaTrader-based signal or copy trading cases, investigative authorities may focus on whether the operator had the actual ability and intent to generate the profits represented to customers. 1. Ability to Generate Profits Investigators may review the operator’s investment experience, trading record, risk management ability, and the explanations given to customers to determine whether the operator had an objective basis for the profits described. If the operator claimed to be an expert despite limited investment experience, or used expressions such as “stable returns,” “principal guaranteed,” or “no-loss trading,” those statements may become important factors in assessing whether the customer was misled. Overseas futures, FX, and CFDs are high-risk derivative products with significant volatility and potential for loss. Therefore, statements implying fixed or stable profits may be viewed unfavorably if they are inconsistent with the actual trading structure and risk profile. 2. Intent to Act in the Customer’s Interest Another key issue is whether the operator genuinely intended to pursue the customer’s investment interest. If the operator’s referral commission increased according to the customer’s trading frequency or trading volume, regardless of whether the customer made a profit or loss, investigators may question whether the operator prioritized referral income over the customer’s investment outcome. For example, if a customer states that they would not have invested had they known that substantial trading fees and referral commissions would be generated, the failure to disclose that fee structure may be considered a form of deception by omission. Issues Under the Capital Markets Act 1. Scope of Quasi-Investment Advisory Business Under Article 101 of the Capital Markets Act, a quasi-investment advisory business generally refers to a business that provides non-individualized investment advice on financial investment products to an unspecified number of clients for consideration, through publications, communications, broadcasts, or similar means. Paid investment advice provided through interactive channels such as KakaoTalk, Telegram, or open chat rooms may go beyond the permissible scope of quasi-investment advisory business and may be regulated as investment advisory business. A quasi-investment advisory business registration alone does not generally allow the operator to provide specific one-on-one instructions to individual users, such as entry points, liquidation timing, stop-loss levels, or take-profit levels. Such conduct may raise issues of unregistered investment advisory business under Articles 17 and 445(1) of the Capital Markets Act. 2. Possible Unregistered Discretionary Investment Management Business In a copy trading structure, if the operator uses a customer’s account, API access, or trading authority to substantially control the management of the customer’s assets, the business may be examined as a possible unregistered discretionary investment management business. Discretionary investment management generally involves managing a client’s assets by making investment decisions on behalf of the client. If the operator goes beyond simply providing market information and effectively controls trading decisions and execution, the conduct may fall within the scope of regulated financial investment business. 3. Possible Unauthorized Investment Brokerage Business If the operator actively directs users to a specific overseas broker, assists with account opening, deposits, or trade execution, and receives commissions in connection with that activity, the structure may raise issues of unauthorized investment brokerage business under Articles 11 and 444(1) of the Capital Markets Act. Simply posting a link or introducing a broker does not automatically amount to investment brokerage. However, if the operator provides account-opening guidance, deposit instructions, trading education, product-specific recommendations, and receives referral commissions, Korean authorities may review the overall business structure to determine whether the operator was effectively engaging in regulated financial investment business. Practical Response During an Investigation In these cases, investigative authorities tend to focus on the operator’s ability, intent, disclosure practices, and the actual structure of referral compensation. Because statements made during the early stages of an investigation may later become important evidence in court, it is important to review the legal structure of the business as soon as the operator is contacted by the police or another investigative authority. Key issues to review include: Whether customers were properly informed of the risks of margin trading, leverage, forced liquidation, and fee structures Whether expressions such as “guaranteed profit,” “stable return,” or “principal guaranteed” were used Whether the current business model falls within the permissible scope of a quasi-investment advisory business How the referral commission structure is connected to customers’ trading volume, trading frequency, or investment performance DECENT Law Office’s Digital Asset and Financial Investment Team advises on criminal and regulatory matters involving MetaTrader-based overseas futures signal services, copy trading structures, referral commission models, and related Capital Markets Act issues. If you have received a criminal complaint, a police summons, or notice of a preliminary investigation, or if you wish to review whether your current business structure is legally appropriate under Korean law, it is important to first examine the specific facts and operational details of the business.
2026-06-10 Naver Blog
