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BlogsVirtual Asset Service Providers Can Now Become Targets of Criminal Investigation
Why Was I Classified as a “Virtual Asset Service Provider”? Many people perceive their conduct as nothing more than simple promotion, operational support, referral activity, customer assistance, or community management. Some believe they never held or managed virtual assets themselves, and that a separate party operated the platform. However, in practice, this perception is often not accepted as it stands. Investigative authorities do not focus on labels or contractual form, but on the degree of actual involvement. What matters is how one contributed to attracting investors, how the activity was connected to the revenue structure, and whether such conduct was carried out continuously or repeatedly. At this stage, many individuals first experience a sense of crisis, realizing, “I didn’t know this could be illegal to this extent.” In reality, many virtual asset–related cases begin not with clear criminal intent, but with poor judgment and misunderstandings about the structure of the business. This article aims to provide practical guidance for those facing similar concerns. Please read the following carefully, as it outlines key issues that should not be overlooked. Legal Definition and Criteria for Determining a Virtual Asset Service Provider 1) Statutory Definition Under Article 2(1)(h) of the Act on Reporting and Using Specified Financial Transaction Information and Article 2(2) of the Virtual Asset User Protection Act, a “virtual asset service provider” refers to any person who, as a business, engages in activities related to virtual assets, including ① buying or selling, ② exchanging, ③ transferring, ④ safekeeping or managing, or ⑤ brokering, arranging, or acting as an intermediary. Pursuant to Article 7 of the Specified Financial Information Act, virtual asset service providers must report to the head of the Financial Intelligence Unit (FIU). Any person who conducts virtual asset transactions as a business without filing such a report is subject to criminal penalties of up to five years’ imprisonment or a fine of up to KRW 50 million (Article 17(1) of the same Act). 2) Standards Established by Supreme Court Precedent In determining whether a person qualifies as a virtual asset service provider, the Supreme Court has held that the key inquiry is whether the individual continuously and repeatedly engages in virtual asset transactions for profit. This determination must be made reasonably, based on social norms, by comprehensively considering factors such as the purpose, type, scale, frequency, duration, and manner of the transactions (Supreme Court Decision, December 12, 2024, Case No. 2024Do10710). The Court further clarified that a general user who continuously and repeatedly trades or exchanges virtual assets solely through an exchange for their own account and benefit would, absent special circumstances, be unlikely to qualify as a virtual asset service provider. However, a person who continuously and repeatedly conducts virtual asset transactions for the benefit of an unspecified number of customers or users, and receives compensation in return, may in principle be deemed a virtual asset service provider (Supreme Court Decision, September 11, 2025, Case No. 2024Do12420). 3) Practical Factors Considered in Investigations Investigative authorities prioritize substance over form. In practice, the likelihood of being classified as a virtual asset service provider increases when the following factors are combined: Access to or ability to manage investor funds or virtual assets Substantial involvement in transaction execution, operation, or intermediation A profit-oriented revenue structure, such as fees, performance-based compensation, or referral commissions Continuity, organization, and repetition of the activity Common Misunderstandings 1) “I Only Lent My Name” or “I Only Provided Technical Support” Such arguments are rarely accepted in practice. In criminal proceedings, courts focus not on formal titles or contractual arrangements, but on the actual performance of tasks and the allocation of profits. Where a conspiracy or joint participation is recognized, even a person who handled only part of the operations may be held jointly liable for the entire offense (Criminal Act, Article 30). 2) Overseas Exchanges, Foreign Corporations, or Offshore Servers Formal structures such as overseas exchanges, foreign entities, or relocating servers abroad do not, in themselves, constitute grounds for exemption from liability. Under Articles 3 and 6 of the Criminal Act, both Korean nationals and foreign nationals who commit crimes within the territory of the Republic of Korea are subject to Korean criminal law, and Korean nationals may also be subject to Korean law for crimes committed abroad. Accordingly, if a business structure targeting domestic users is identified, Korean criminal law may apply regardless of server location or place of incorporation. 3) “I Can File a Report Later” This assumption can lead to irreversible consequences. Article 17(1) of the Specified Financial Information Act imposes criminal penalties of up to five years’ imprisonment or a fine of up to KRW 50 million on those who conduct virtual asset transactions as a business without filing a report. Such violations cannot be cured through ex post reporting. Moreover, to file a valid report as a virtual asset service provider, requirements such as ① obtaining Information Security Management System (ISMS) certification, and ② securing real-name verified deposit and withdrawal accounts must be satisfied (Article 7(3) of the same Act). Even if these requirements are met at a later stage, criminal liability for previously unreported business operations cannot be avoided. This is therefore a matter that should never be taken lightly. Decent Law Firm’s Assistance – Why Immediate Intervention Is Critical The most dangerous scenario in virtual asset cases arises when investigative authorities have already structured the case internally on the assumption that the individual is a virtual asset service provider, while the individual themselves remains unaware of this classification. In such circumstances, explanations offered may function not as a defense, but as confirmation. Decent Law Firm’s approach begins by dismantling and reassessing the structure of the case. We separate operational, promotional, technical, and financial elements by function and timeline, reorganizing the actual scope of involvement and examining whether the classification as a service provider itself can be contested. At the same time, we assess whether there is room to avoid designation as a principal or accomplice, and how far criminal liability may extend. Beyond criminal defense, we also evaluate long-term administrative risks, including FIU sanctions and future reporting restrictions. At this stage, the need for professional intervention is clear. A single misstep can lead to irreversible consequences. If you have already been contacted by authorities or informed of a potential change in your legal status, this is not a matter to assess on your own. In virtual asset service provider cases, the initial response strategy effectively determines the outcome. If you are reading this, you are still at a point where a strategic response can be formed.
2026-01-06 Naver Blog -
Blogs
If Recovering Losses from a Copy Trading Scam Is Urgent
1. How Copy Trading Scams Typically Begin Copy trading scams often start by gaining investors’ trust through phrases such as automated trading, professional management, or profit mirroring. Statements like “you don’t need to trade yourself” or “just follow a verified account” appear to reduce the burden of investment decisions. In fact, small profits may be generated in the early stages, making the scheme seem like a legitimate investment. However, after a certain period, a recurring pattern of inducing additional deposits begins. As the invested amount increases, withdrawals are delayed. Investors are asked to prepay fees or accept changing conditions, followed by loss of contact or restricted account access—at which point the damage becomes final. Unlike a simple investment loss, cases suspected to involve copy trading scams hinge on whether there was an intent to deceive investors and unlawfully obtain financial gain. Because this determination is made by comprehensively examining the transaction structure, fund management practices, and the operator’s conduct, becoming a victim without having the opportunity to explain one’s position is far from uncommon. 2. The Core Structure That Makes It Look Like a Legitimate Investment Copy trading scams are often highly sophisticated in appearance. They are designed to resemble lawful investment services through real-time trading screens, screenshots of profit verification, and performance graphs. Some even use interfaces similar to actual exchanges to eliminate suspicion. However, there is a clear gap between the structure perceived by the investor and the way the system is actually operated. Whether this discrepancy constitutes a violation of the duty to disclose material information or amounts to deceptive conduct depends on the specific facts of each case. If there is a material inconsistency between how the investment structure was explained and how it was actually operated—and that inconsistency influenced the investor’s decision—it may serve as a key basis for establishing fraud. 3. The Three Questions Victims Ask Most Frequently Q1. Can it still be considered fraud even if I actually made profits? Yes. Initial profit payouts are often used to build trust and induce additional deposits. The key issue is not whether profits occurred, but how those profits were generated. Q2. The account was in my name—can this still be considered fraud? What matters more than the account holder’s name is who actually controlled the trades and the funds. If the operator effectively controlled the transactions, it may be difficult to view the activity as a normal investment. Q3. When should I consider legal action if withdrawals are blocked? Once withdrawal conditions are repeatedly changed or additional payments are demanded, delaying a response is risky. If this is accompanied by avoidance of contact or account restrictions, immediate legal assessment is required. 4. How Decent Law Firm Provides Assistance Decent Law Firm does not treat copy trading scam cases as mere investment disputes. From the earliest stage, we focus not only on individual losses, but on the overall transaction structure and fund flows. We organize legal issues based on the substance of the investment method, the operator’s level of involvement, and indicators of fund control. Based on this analysis, we assess the feasibility of criminal complaints and investigation responses, while also considering parallel recovery measures such as civil damages claims or restitution of unjust enrichment. In copy trading scam cases, outcomes vary significantly depending on the initial response. Drawing on extensive experience with virtual asset and automated trading matters, we provide clear, practice-oriented strategies that reflect the key points investigators focus on. Accurately identifying the structure is what ultimately determines the direction of the case.
2026-01-05 Naver Blog -
Blogs
If You Need Assistance from a Labor Law Specialist, Read This Carefully
1. In Labor Disputes, a Single Misstep Can Alter the Course of Your Life Labor disputes are not merely “disagreements with an employer.” An unjust dismissal or excessive disciplinary action can lead to permanent career disruption. Unpaid wages may escalate into criminal complaints or civil litigation. In cases involving serious industrial accidents, business owners or executive officers may face criminal liability under the Serious Accidents Punishment Act (Article 2, Paragraph 9 of the Act on Punishment of Serious Accidents, etc.). In particular, labor disputes cannot be resolved by reviewing the Labor Standards Act alone. Multiple statutes operate simultaneously, including the Trade Union and Labor Relations Adjustment Act, the Occupational Safety and Health Act, and the Serious Accidents Punishment Act. Depending on the initial response strategy, administrative sanctions, criminal liability, and civil damages risks can compound rapidly. The most dangerous decision at this stage is thinking, “I’ll try to handle this on my own.” The anxiety and pressure you are feeling right now are not excessive. Once the direction of a labor dispute is set incorrectly, it is extremely difficult to reverse—and the consequences are far heavier than most expect. This is why early involvement of a labor law specialist is often the decisive starting point. 2. If Any of the Following Apply, You Are Already in the Middle of a Labor Dispute Labor disputes do not occur only in exceptional cases. If any of the situations below apply to you, your circumstances are likely already subject to legal evaluation. You have received notice of unfair dismissal or disciplinary action, or you are being pressured to resign Wages, severance pay, or overtime/night/holiday pay have not been properly paid You are facing issues related to workplace harassment or sexual harassment, or an internal investigation is imminent You are classified as a freelancer or platform worker and are denied protection under the Labor Standards Act due to the contract structure Liability issues have arisen following an industrial accident You have received notice from the Ministry of Employment and Labor (local labor office or branch) regarding a complaint investigation, labor inspection, or criminal case initiation Although these cases may appear similar on the surface, the applicable laws and standards of proof differ significantly. Missing the right timing or choosing the wrong strategy can leave adverse records, which may hinder you throughout all subsequent proceedings. At this stage, the role of a labor law specialist is not merely that of a representative, but rather a coordinator who determines how far legal risk can be controlled. 3. Common and Critical Mistakes Repeated in Labor Disputes This section addresses recurring errors frequently seen in practice. Typical examples include responding emotionally and leaving legally disadvantageous messages through texts or messaging apps, or filing complaints before labor authorities without adequately organizing facts and evidence. Another frequent mistake is choosing the wrong order among criminal, administrative, and civil procedures, thereby narrowing one’s own legal position. These errors may seem minor, but they can lead to irreversible consequences. This is precisely why early involvement of a labor law specialist is essential. 4. How Decent Law Firm Provides Support – Controlling Labor Risk Decent Law Firm does not approach labor cases as isolated disputes. We structure evidence with investigations and litigation in mind, and design the overall case flow through procedural risk analysis at each stage. In particular, cases are led by Attorney Junhyung Park, who is also a Certified Labor Attorney, with extensive experience in both major law firm labor teams and labor consulting firms. This ensures a consistent and integrated approach where legal and labor issues are not treated separately. Drawing on experience representing both employers and employees, we provide realistic options tailored to each case, while managing complex risk factors linked to labor management, accounting, and industrial accident matters. Our goal is not to offer abstract explanations, but to deliver response strategies that lead to tangible results for clients facing anxiety and pressure due to labor issues. Labor disputes can escalate into irreversible burdens the moment the initial direction is misjudged. For this reason, professional control from the very beginning is essential. Decent Law Firm is committed to providing tailored, controllable solutions—focused not on inflaming disputes, but on managing them strategically for each client’s specific situation.
2026-01-01 Naver Blog -
Blogs
If You Are a Victim of Telegram Crypto Scams—Read This Carefully
1. How Telegram Crypto Scams Work & Common Tactics Telegram itself is merely a messaging app. The scams exploit anonymity, closed private groups, and bots to deceive victims and induce mistakes. In practice, perpetrators use false information or exaggerated profit promises to mislead victims into making incorrect decisions and then misappropriate their assets. They often rush decisions with phrases like “signal room,” “VIP,” “inside information,” “kimchi premium,” “airdrop,” or “high-yield staking,” following a recurring pattern: deposit inducement (deception) → withdrawal restrictions (retaining proceeds and concealing losses) → requests for additional payments (secondary deception) → disappearance (evidence destruction and flight). Legally, fraud can already be established at the moment of the initial deposit inducement. Subsequent stages may constitute a continuation of the offense or separate counts of fraud. Common scam types include: Signal-room schemes: Promising “multiple-X returns” or “stop-loss lines,” then charging membership or commission fees. Fake exchanges/apps: Luring users via links, showing fake profits, then blocking withdrawals. Advance withdrawal fee schemes: Demanding extra transfers for “fees,” “taxes,” or “KYC costs” before withdrawal. Wallet connection/signature scams: Inducing wallet connections or signatures under the guise of verification or airdrops to drain assets. OTC direct-deal scams: Promising USDT exchange or similar services, taking the transfer, then cutting contact. 2. Telegram Crypto Scam Red Flags The more of the following that apply, the higher the likelihood of deception: Guaranteed principal or profits. Pressure to decide quickly and discouragement of external verification. Claims that additional deposits are required to withdraw. Vague or unverifiable exchange/project information; difficulty confirming official channels. Requests to transfer funds to third-party accounts or personal wallet addresses. Instructions to delete chats, prohibit screenshots, or otherwise avoid leaving evidence. 3. What to Do Within 24 Hours & How to Secure Evidence First, stop all additional transfers immediately. Claims like “withdrawal will be released once you pay the fee” often lead to secondary losses. Preserve evidence: Telegram chats can be auto-deleted or removed by the other party. Immediately save screenshots, screen recordings, and exported chats for group rooms, DMs, announcements, and instructions. Collect evidence: Counterparty IDs, room links/names, inducement messages, deposit/withdrawal records, TXIDs, wallet addresses, timestamps and amounts, and KRW transfer records (recipient name and account). Create a timeline: Summarize on a single page “when–who–what was said–where–how much was sent.” Immediate actions: KRW transfers: Contact the relevant financial institution at once to request payment suspension for suspected scam accounts pursuant to the Electronic Financial Transactions Act. Upon report, the institution should promptly suspend payments where scam use is suspected. Crypto transfers: As virtual assets are not directly covered by the Act, contact the relevant exchange immediately to request withdrawal blocking under its terms, and file a report with investigative authorities to seek exchange cooperation and on-chain tracing. Parallel legal steps: Criminal complaint: File promptly for fraud (Criminal Act Art. 347) to enable investigation, suspect identification, and asset tracing. Civil action: If the perpetrator’s identity and assets can be identified, consider a damages claim (Civil Act Arts. 750, 751) and pre-judgment attachment to prevent asset dissipation. Recovery options: Consider compensation orders within criminal proceedings or applications for crime-victim relief funds, where applicable. 4. How Decent Law Firm Can Help Decent Law Firm structures the facts to identify key deception points and fund flows required for complaints and petitions. We systematize chat records, transaction histories, and wallet movements into evidentiary packages aligned with investigative tracing and recovery procedures, while assessing the practicality of civil measures such as attachments and damages claims to maximize cost-effectiveness. Above all, we focus on preventing secondary losses at the most vulnerable stage—additional payment inducements—by providing clear, timely guidance. If you have been affected, we encourage you to seek advice before it’s too late.
2026-01-01 Naver Blog -
Blogs
Key Issues in Stock Option Disputes
A Stock Option Lawyer’s Perspective Stock option disputes often turn on the exact wording of the agreement and how the terms were explained at the time of grant. In practice, a single clause—or the absence of one—can lead to disputes worth millions of dollars. Stock options usually begin as an “incentive for talent.” However, when variables such as failed IPOs, resignation or termination, or changes in company valuation arise, stock options quickly become one of the most contentious legal issues in corporate disputes. 1. Why Do Stock Option Disputes Keep Occurring? At their core, stock options are based on future value appreciation. The company promises significant rewards if it grows, and employees commit their efforts based on that expectation. Disputes arise when those expectations diverge. Growth may stall, valuations may decline, or unexpected resignation or dismissal may occur. At that point, one party often claims, “This was not the condition we agreed to.” Common causes of stock option disputes include: Vague or ambiguous contract language open to multiple interpretations Key terms explained verbally but not documented in writing or email No clear rules governing exercisability upon resignation or termination These gaps allow each party to interpret the agreement in their own favor, frequently leading to litigation. 2. Lessons from the Flex Case: Cash-Settled vs. Equity-Settled Stock Options A widely discussed case in the Korean startup ecosystem involving Flex, an HR technology company, highlights the importance of specificity in stock option agreements. The central issue was whether the options were: Equity-settled (physical delivery): Shares are issued upon exercise, or Cash-settled (difference settlement): Only the difference between the exercise price and fair market value is paid in cash Korean law explicitly allows cash-settled structures. Under Article 340-2 of the Korean Commercial Act and Article 16-3 of the Special Act on Venture Business Promotion, companies may compensate the exercise gain in cash or treasury shares equivalent to the price difference. Key legal issues a stock option lawyer examines in such cases: Explicit contractual language: Does the agreement clearly permit cash settlement? If not, courts may presume physical share delivery. Procedural clarity: Are the exercise method and payment mechanics clearly defined? Duty to explain: Did the company adequately explain the structure and risks (including tax implications), and is there documentary evidence such as emails or briefing materials? 3. Tax Risk: Why “Tax Bombs” Occur Tax issues can be as damaging as legal disputes. In many cases, tax authorities impose substantial additional assessments years after the exercise. Valuation disputes: Stock option gains are generally taxed as employment income. For private companies, determining “fair market value” is critical. Even if tax was initially paid based on a low valuation, later discovery of third-party transaction prices may lead to reassessment and retroactive taxation. Loss of tax benefits: Failure to meet venture company tax exemption or deferral requirements in advance may result in losing valuable tax incentives altogether. Without proactive tax planning, compensation can quickly turn into a liability. 4. Group Structures and M&A Complications Legal complexity increases significantly in holding company, subsidiary, or M&A scenarios. Cost allocation issues: When a parent company grants stock options to subsidiary employees, determining who bears the cost—and whether it is tax-deductible—requires careful structuring and internal agreements. IPO failure or M&A scenarios: Many employees rely on “exercisable upon IPO” clauses. If the IPO is canceled or the company is acquired, options may become worthless unless the contract clearly addresses acceleration, succession, or cash compensation. A well-drafted agreement must include a clear exit strategy covering changes in control, failed listings, and acquisition scenarios. 5. Stock Option Lawyers Start with Preventive Design Stock options are not merely an HR matter—they are a core corporate legal issue. Decent Law Firm’s corporate law team advises not only on dispute resolution, but also on preventive legal structuring. Our approach includes: Compliance review: Articles of incorporation, shareholder resolutions, statutory procedures, and registrations Precision drafting: Clear distinction between cash-settled and equity-settled options; detailed rules for voluntary resignation, involuntary termination, and disciplinary actions Contingency planning: Treatment of options in M&A, IPO cancellation, or control changes Tax risk management: Advance analysis of taxation timing and valuation risks Dispute resolution: Legal opinions, contract interpretation, and litigation support in damages claims A well-structured stock option plan and clear explanatory materials serve as proof of a company’s credibility to both talent and investors. With extensive experience from large corporations and in-house legal teams, Decent Law Firm understands internal decision-making structures and real-world business dynamics. For complex stock option issues, Decent Law Firm’s corporate law team provides clear, defensible standards.
2025-12-31 Naver Blog -
Blogs
Promoting Bybit Coin Referrals Is Now Risky — Illegality Concerns Are Real
1. Why Coin Referrals Are Becoming a Serious Legal Issue In recent virtual asset–related investigations, referral structures such as Bybit coin referrals have been repeatedly scrutinized. This trend stems from the clear stance taken by the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU). The FIU has consistently emphasized that it is, in principle, illegal for unreported virtual asset service providers (VASPs) to solicit, broker, or intermediate transactions for Korean residents, or to support KRW-based payments. At present, only 27 operators have completed official registration in Korea. If domestic or overseas platforms not included on this list operate Korean-language websites, provide KRW deposits or withdrawals, or conduct promotions targeting Korean users, they face a substantial risk of violating the Act on Reporting and Using Specified Financial Transaction Information (the “Specified Financial Information Act”). This standard applies equally to overseas exchanges if they target Korean residents. The core issue, however, lies in the lack of a clearly defined boundary as to what constitutes “virtual asset service provider activity.” Because enforcement authorities assess factors such as repetition, fee structures, and the scope of customers on a comprehensive basis, the line between mere personal use and business activity remains blurred. In this environment, investigative risks are rapidly expanding—and coin referral structures have increasingly come under scrutiny. 2. What Bybit’s Recent Announcement Signifies Bybit’s recent official compliance announcement carries significant implications. The exchange made clear its intention to strengthen a global compliance framework aligned with local regulations and to allow marketing, promotion, and user solicitation only in jurisdictions where regulatory requirements are satisfied. With respect to Korea, Bybit explicitly addressed the risks associated with unregistered marketing and intermediary activities, including brokerage-like conduct. It prohibited referral and commission-based structures that specifically target Korean users. Bybit further stated that it is restricting referral and commission-based promotional activities aimed at Korea, and that if such activities are identified, partnership termination and commission clawbacks may follow. This indicates that even overseas exchanges now recognize Korean-targeted referral schemes, such as Bybit coin referrals, as a clear regulatory risk and are beginning to draw firm boundaries. 3. Structures That Law Enforcement Authorities Actually Focus On In practice, referral activities are rarely assessed in isolation. Instead, they are evaluated in conjunction with other transactional structures. For example, when repetitive P2P or OTC transactions are conducted through Telegram or open chat rooms, and a fee structure exists alongside repeated trades, such activity is likely to be classified as “transactions conducted for business purposes.” In several cases, this has led to violations of the Specified Financial Information Act. Similarly, currency exchange structures exploiting the so-called “Kimchi premium” may pose relatively low risk if limited to simple arbitrage. However, when combined with false invoices or quid pro quo remittances, they can give rise to violations of the Foreign Exchange Transactions Act, the Specified Financial Information Act, and even obstruction of business charges. Within this context, inducing users to open accounts on unregistered overseas exchanges and receiving transaction-volume–linked commissions—such as in Bybit coin referral schemes—may be deemed to involve elements of brokerage, intermediation, or agency, making them potential targets of investigation. Although standalone precedent is limited, cases in which such conduct is combined with investment solicitation or deceptive practices frequently escalate into criminal matters. A single act that was previously taken lightly can be interpreted as a critical link in a serious criminal scheme—this risk should never be underestimated. 4. Decent Law Firm’s Support in Virtual Asset Investigations In Bybit coin referral–related cases, outcomes often hinge on what is properly organized and clarified at the earliest stage. If factors such as transaction frequency and repetition, the existence of a commission structure, the scope of counterparties, awareness of fund sources, and one’s actual role are not systematically analyzed, even a minor matter can expand into allegations of participation in a serious criminal offense. For those facing uncertainty and anxiety at this stage, practical and experience-based legal assistance is essential. Decent Law Firm analyzes key issues by integrating FSC and FIU materials and guidelines, investigative practices, and recent case law, carefully assessing whether a client may be deemed a virtual asset service provider and whether the matter could be linked to other criminal offenses. We provide comprehensive support—from interview and statement strategies at the investigation stage, through warrant proceedings, to substantiation and defense at trial—going beyond advisory services to help design the overall structure of the investigation response. If you have received a request for appearance or are facing a search and seizure, this moment is critical. If you are concerned about issues related to Bybit coin referrals, this is not a matter to be taken lightly. Decent Law Firm’s Virtual Asset Task Force will stand with you throughout the process.
2025-12-30 Naver Blog
