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Blogs CivilFalse Naver Blog Posts Targeting Your Business in Korea: How to Request Removal
When Online Defamation Affects Your Business in Korea In South Korea, Naver remains one of the most influential online platforms for search, blogs, and reputation management. For businesses operating in Korea, what appears on Naver can directly affect customer trust, business inquiries, and brand credibility. In recent years, some businesses have discovered Naver blog posts that mention their company or brand name together with words such as “scam,” “fraud,” or “victim warning.” These posts may appear professional and persuasive, even when the underlying facts are inaccurate, misleading, or unrelated to the business itself. For foreign-owned companies or international businesses operating in Korea, this type of reputational damage can be especially difficult to detect and respond to. The content may be written in Korean, indexed on Naver, and viewed as credible by local customers before the company becomes aware of it. Under the Act on Promotion of Information and Communications Network Utilization and Information Protection (the “Network Act”), a business whose reputation or other rights have been infringed online may request deletion of the content or temporary blocking of access to the content. Applicable Law ▪️Article 44-2 of the Network Act: Deletion Requests and Temporary Measures Article 44-2(1) of the Network Act provides that a person whose rights, including privacy or reputation, have been infringed through information distributed via an information and communications network may request the relevant service provider to delete the information or publish a rebuttal. Under Article 44-2(2), once such a request is received, the service provider must take necessary measures, such as deletion or temporary blocking, without delay and notify both the requester and the person who posted the content. Where it is difficult to determine whether a rights infringement has occurred, or where a dispute between the parties is expected, Article 44-2(4) allows the service provider to temporarily block access to the content. The duration of such temporary measures may not exceed 30 days. ▪️Criminal Liability for Online Defamation If an online post contains false statements of fact that damage another person’s or company’s reputation, Article 70(2) of the Network Act may apply. The statutory penalty is imprisonment for up to seven years, disqualification for up to ten years, or a fine of up to KRW 50 million. Even if the statements are true, Article 70(1) may still apply if the post was made with intent to defame. In that case, the statutory penalty is imprisonment for up to three years or a fine of up to KRW 30 million. Category Legal Basis Possible Penalty Defamation by false statements of fact Network Act, Article 70(2) Up to 7 years’ imprisonment or KRW 50 million fine Defamation by true statements of fact Network Act, Article 70(1) Up to 3 years’ imprisonment or KRW 30 million fine Civil damages Civil Act, Article 750 Compensation for financial and reputational harm Criminal liability depends on the specific content, context, and intent behind the post. However, a business may still pursue platform-level removal or temporary blocking even where the criminal threshold is not yet clear. Key Legal Issues ▪️Scope of Defamation Under Article 44-2 The standard for requesting deletion or temporary blocking under Article 44-2 is broader than the standard for criminal defamation under Article 70 of the Network Act or Article 307 of the Criminal Act. In practice, the key issue is whether the online post infringes the company’s rights, including its reputation. It is not always necessary to prove criminal intent at the initial platform reporting stage. For example, if a Naver blog post places a company’s brand name next to terms such as “scam” or “fraud,” while the actual content concerns an unrelated impersonator or third party, the overall impression created for ordinary readers may still be misleading. In some cases, this may support a removal or temporary blocking request. Evidence of reputational harm is also important. Businesses should preserve records showing the impact of the post, such as customer complaints, cancelled inquiries, KakaoTalk messages, emails, screenshots, call logs, and changes in online search results. ▪️What Happens If the Poster Files an Objection If the person who posted the content files an objection, the temporary blocking may remain in effect for 30 days from the date the objection is received. After that period, the post may be restored. In that situation, the affected business may consider filing a defamation mediation request with the Korea Communications Standards Commission’s Internet Harm Relief Center. If mediation is successful, the settlement may have an effect similar to a civil settlement agreement. The Limits of Platform Reporting Alone Filing a removal request through Naver’s Rights Protection Center is an important first step, but it may not fully resolve the problem. If the poster files an objection, the content may be restored. If similar posts are uploaded again under different accounts or URLs, each post must usually be addressed separately. Where harmful posts are being published repeatedly or systematically, platform reporting alone may not be enough. In such cases, a formal letter of demand issued in the name of a Korean law firm, together with potential criminal complaints or civil damages claims, may be more effective. How Decent Law Firm Can Assist Responding to false or misleading online content in Korea requires more than simply submitting a platform report. Businesses must consider the wording of the removal request, the legal basis for rights infringement, the preservation of evidence, and the possibility of further civil or criminal action. Decent Law Firm assists businesses with each stage of this process, including removal requests, formal letters of demand, Korea Communications Standards Commission proceedings, criminal complaints, and civil damages claims where appropriate. If you have identified Naver blog posts or other online content that may be harming your business in Korea, please share the relevant URLs and a brief explanation of the impact. We will review the matter and advise on the most appropriate course of action. ※ This content is provided for general informational purposes only and does not constitute legal advice in relation to any specific matter.
2026-05-28 Naver Blog -
Blogs Criminal
Sexual Grooming Offenses and Article 15-2 of Korea's Juvenile Protection Act
Recent years have seen a sharp rise in cases involving the online sexual grooming of minors through social media platforms such as Twitter (X) in South Korea. Article 15-2 of the Act on the Protection of Children and Youth from Sexual Abuse (hereinafter "the Act") was enacted in March 2021 and amended in April 2025. Criminal liability can arise even where no in-person meeting or sexual act takes place. Applicable Law Article 15-2 of the Act prohibits the following conduct by any person aged 19 or older targeting a child or youth: Repeatedly or continuously engaging in sexually explicit conversations likely to cause humiliation or disgust, or inducing or soliciting a child or youth to engage in sexual conduct. The statutory penalty is imprisonment of up to three years or a fine of up to 30 million Korean won. The April 2025 amendment introduced two significant changes. First, a new paragraph 2 was added covering conduct targeting children under the age of 16. Under this provision, prosecutors are no longer required to prove sexual exploitation as the purpose — the conduct itself is sufficient for criminal liability. This substantially lowers the evidentiary burden for investigators. Second, a new paragraph 3 was added explicitly criminalizing attempted offenses. This means that even where no actual meeting or sexual conduct occurs, criminal liability can still attach. Category Key Content Penalty Repeated sexually explicit messaging (Art. 15-2 §1-1) Sending sexually explicit messages repeatedly Up to 3 years imprisonment or fine up to KRW 30 million Inducement or solicitation (Art. 15-2 §1-2) Proposing meetings or sexual acts Same Victims under 16 (§2, added 2025) No proof of purpose required Same Attempted offenses (§3, added 2025) Includes undercover officer scenarios Punishable as attempt Source: National Law Information Center, Act on the Protection of Children and Youth from Sexual Abuse, Art. 15-2 (amended April 22, 2025) Key Legal Issues ▪️Criminal Liability When the Other Party Is an Undercover Officer Following the April 2025 amendment, Article 15-2 paragraph 3 now explicitly provides for the punishment of attempted offenses. Even where the other party was an undercover police officer and no actual meeting or sexual conduct occurs, there is a clear statutory basis for prosecution. While sentencing courts may consider mitigating factors, avoiding criminal liability altogether is difficult. ▪️Awareness of the Victim's Age Investigators assess whether the suspect was aware — or reasonably should have been aware — that the other party was a minor. Beyond direct statements of age, circumstantial evidence such as writing style, references to school life, and the nature of the platform used can all be relied upon to establish that awareness. ▪️Digital Forensics and Additional Charges When a suspect is investigated for this offense, law enforcement will typically seize and forensically examine their mobile device. In practice, this process has led to additional charges being filed based on unrelated material discovered on the device. Where further offenses come to light, the case may proceed to full criminal trial rather than being resolved through fines or non-indictment dispositions. Sentencing Trends Given that this provision was only recently enacted, there is limited case law to draw from. Based on cases handled to date, matters involving first-time offenders where no actual sexual conduct occurred have in some instances been resolved through fines or non-indictment dispositions. However, outcomes vary significantly depending on how the suspect responds during the investigation, the quality of early legal representation, and the results of forensic examination. As courts continue to handle cases under the amended law, sentencing trends may shift. Decent Law Firm Cases involving online sexual grooming offenses require careful analysis across multiple areas: review of the full conversation history, assessment of age awareness, management of the forensic examination process, and application of the attempt provisions under the amended law. The criminal defense team at Decent Law Firm has been advising clients on matters under the Act on the Protection of Children and Youth from Sexual Abuse from the earliest stages of investigation. If you have received contact from law enforcement or been issued a notice to appear for questioning, it is important to obtain legal advice before responding to investigators or confirming an interview date.
2026-05-26 Naver Blog -
Blogs Labor · Employment Disputes
Collective Bargaining With Principal Contractors: A Successful Strategy Learned From Department Store and Duty-Free Shop Salesperson Cases
Why This Case Matters Now Sales employees working for brands operating inside department stores and duty-free shops have long been caught between two different “employers.” The tenant company that signed the employment contract paid the wages, but the department store or duty-free operator controlled the actual working conditions — including working hours, days off, customer service methods, and even restroom usage. Even when workers demanded collective bargaining, they were often blocked by the response: “We are not the party to the employment contract.” Labor Relations Commissions also frequently sided with the companies. That barrier began to collapse with a single judgment issued by the Seoul Administrative Court on October 30, 2025. Then, with the revised Labor Union Act taking effect on March 10, 2026, the principle was formally incorporated into the law. Key Legal Principles Recognized by the Court ① The Standard of Substantial Control — Expanding the Concept of “Employer” Beyond Contractual Relationships The court held that the concept of an “employer” should not be interpreted narrowly as merely the direct party to the employment contract. Instead, it should be broadly interpreted to include entities that substantially and concretely control or determine working conditions. This reflects the modern reality in which technological development and evolving labor structures have created various nontraditional employment arrangements where labor is provided without direct contractual relationships. ② Scope of Bargaining Subjects — Even Management-Related Issues May Become Negotiable Matters The court recognized that issues such as: Guaranteeing collective rest rights Protecting customer service workers Use and expansion of workplace facilities constitute matters directly related to improving working conditions and therefore qualify as legitimate subjects of collective bargaining. However, the court also clarified that whether the companies were ultimately required to accept those demands was a separate issue. In other words, the court clearly distinguished between: The existence of a duty to engage in collective bargaining, and An obligation to accept the union’s demands ③ Relationship With the Revised Labor Union Act — Applicability Even Before the Amendment Following the March 2026 amendment to the Enforcement Decree of the Labor Union Act, procedures for handling correction applications relating to bargaining demands against principal contractors were formally established. However, the court held that even without the legislative amendment, the existing interpretation of the Labor Union Act alone was sufficient to recognize employer status for principal contractors exercising substantial control over working conditions. In other words, even before the revised law took effect, lower court decisions had already recognized that a principal contractor could bear collective bargaining obligations where substantial and concrete control over working conditions existed. How to Prepare for Collective Bargaining With a Principal Contractor What Labor Unions Should Review Identifying substantial control by the principal contractor Designing appropriate bargaining agendas Sending and preserving official bargaining requests Utilizing Labor Relations Commission procedures Establishing solidarity and collective action strategies What Employers Should Carefully Consider Compliance with bargaining notice obligations Risks associated with claiming “we are not the employer” Discussions regarding the scope of bargaining subjects If This Is Your First Principal Contractor Bargaining Case Now is one of the most favorable times to demand collective bargaining, as court precedents and Labor Relations Commission decisions continue to accumulate and the revised Labor Union Act has officially taken effect. However, even a single procedural mistake may result in losing the opportunity to exercise bargaining rights. Decent Law Firm provides comprehensive legal support throughout the entire collective bargaining process involving principal contractors, including: Review of employer status issues Design of bargaining agendas Assistance with bargaining demand procedures Representation before Labor Relations Commissions and administrative courts If you are preparing to demand collective bargaining from a principal contractor, or if your bargaining request has already been rejected, now is the time to seek legal guidance and establish the proper response strategy.
2026-05-21 Naver Blog -
Blogs Criminal
Bitcoin and Drug Transactions in Korea — Applicable Laws and Legal Considerations
This article explains the laws that apply when Bitcoin or other cryptocurrency is used as a means of transferring drug transaction payments, or when drug-related funds flow into a cryptocurrency over-the-counter (OTC) operation. It also outlines how Korean investigative authorities assess culpability and what legal issues arise in these cases. 1. How Cryptocurrency Becomes Linked to Drug Trafficking Bitcoin and other virtual assets have become increasingly exploited as a means of transferring drug transaction payments, primarily due to their perceived anonymity and the ability to send funds across borders instantly. A common structure involves a drug buyer depositing cash into an OTC channel, which then purchases Bitcoin and transfers it to a wallet address specified by the seller. Korean law enforcement has responded by establishing dedicated cryptocurrency investigation units to pursue these cases. In a recent large-scale operation, the Gyeonggi Southern Police Agency investigated a drug network operating through Bitcoin and Telegram over approximately one year, arresting 122 individuals and detaining 47 of them pending prosecution. 2. Applicable Laws and Penalties In cases where drug-related funds are traced through a cryptocurrency OTC operation, investigators do not limit their approach to a single charge. Multiple laws are applied concurrently as a combined offense. 1) Aiding and Abetting under the Narcotics Control Act (Criminal Act, Article 32) Even without directly purchasing, selling, or distributing narcotics, a person who facilitates the transfer of drug transaction payments via Bitcoin may be prosecuted as an accomplice. Korean police have confirmed that individuals who assist in drug distribution through online virtual asset transactions — without ever meeting the drug dealer — can be charged with aiding and abetting under the Narcotics Control Act. Under Article 58(1) of the Narcotics Control Act, the principal offender in a drug sale faces life imprisonment or a minimum of five years in prison. An accomplice, after the statutory reduction of one-half under Article 32(2) of the Criminal Act, may still face a minimum of two years and six months of imprisonment. This is not a minor charge. 2) Act on Reporting and Using Specified Financial Transaction Information (ARUSFTI) Violation Operating an unlicensed virtual asset exchange service for profit — without registering with the Financial Intelligence Unit (FIU) — constitutes a violation of Article 7(1) of the ARUSFTI, punishable under Article 17(1) by up to five years in prison or a fine of up to KRW 50 million. The key factor is "business continuity." Unlike a one-time transaction between acquaintances, repeated exchanges conducted for profit establish the commercial nature of the activity, making criminal prosecution far more straightforward for investigators. 3) Act on Regulation and Punishment of Criminal Proceeds Concealment (ARPCPC), Article 3 If a person transfers or converts funds while being aware — even vaguely — that those funds derive from illegal activity, this constitutes concealment or disguising of criminal proceeds. It is not necessary to know the specific nature of the crime. The penalty is up to five years in prison or a fine of up to KRW 30 million. 3. The Central Legal Issue: How Authorities Establish Criminal Intent The most common defense in cryptocurrency OTC cases is: "I had no idea the funds were related to drugs." However, Korean courts have consistently held that full knowledge of the specific crime is not required. "Such recognition is sufficient if the person was aware that the relevant property constitutes criminal proceeds as defined under the law — it is not necessary to know the specific type of crime or its concrete details." — Supreme Court of Korea, January 11, 2007, Decision 2006Do5288 In actual drug-related cryptocurrency cases, prosecutors and police have framed criminal intent in charging documents as follows: the suspect "transferred Bitcoin after recognizing and anticipating that the payment constituted the proceeds of narcotics transactions." This framing — recognition and anticipation — is how investigators establish what Korean law calls dolus eventualis (indirect intent, or awareness of probable consequences). The external circumstances investigators use to infer this intent include: Informal transaction structure: Conducting transactions through Telegram rather than a licensed exchange, receiving funds via anonymous bank deposits Abnormally high commission rates: Charging 10–16% per transaction, far exceeding standard exchange fees. Investigators treat this as compensation for the legal risk — effectively a premium for facilitating illegal activity No customer verification (KYC): Failing to confirm the identity, purpose, or source of funds from any counterparty Concentration of transfers to a single wallet: The majority of Bitcoin transfers flowing consistently to the same wallet address, later identified as belonging to a drug seller Continued operation after prior investigation: Resuming OTC operations after having already been investigated for a related matter When these factors are present in combination, investigators build the case that the suspect could not reasonably have been unaware of the illegal nature of the transactions. 4. How Korean Authorities Track Cryptocurrency Transactions The assumption that cryptocurrency transactions are untraceable is no longer accurate. Korean law enforcement employs sophisticated methods to follow the money. ▪️Blockchain Forensics and On-Chain Data Analysis Every Bitcoin transaction — its timestamp, wallet address, and amount — is permanently recorded on the blockchain and cannot be deleted. Once a drug seller's wallet address is identified, all wallet addresses that transferred Bitcoin to that address are immediately traceable, including OTC operators and their associated bank accounts. ▪️Exchange Warrants and Account Seizure Domestic cryptocurrency exchanges are required by law to provide account information, transaction records, and identity verification data upon receipt of a warrant. A single transaction routed through a Korean exchange is sufficient for investigators to identify a person. The Supreme Court of Korea ruled in December 2025 that seizure of Bitcoin held in exchange-linked wallets is lawful, further expanding the investigative reach of authorities in cryptocurrency-related cases. 5. Key Legal Considerations If You Have Been Contacted by Authorities ▪️Clarify the Scope of the Charges Early Aiding and abetting under the Narcotics Control Act, violations of the ARUSFTI, and violations of the ARPCPC each have different legal elements. Understanding which charges are actually in play — and designing a response strategy for each — should happen at the earliest possible stage. ▪️Objective Demonstration That Criminal Intent Was Absent Saying "I didn't know" is not a legal defense in itself. What is required is an objective and documented account of why the transactions could reasonably have appeared legitimate — including any deception by the counterparty regarding their identity or the purpose of the funds. Relevant materials may include messaging records, transaction logs, and contemporaneous communications. ▪️The First Police Interview Is Critical By the time investigators issue a summons, they have typically already obtained blockchain analysis results and financial records. Statements made in the first interview that are inconsistent with documentary evidence can be used to confirm the existence of criminal intent. It is strongly advisable to consult a legal professional and establish a clear statement strategy before attending any police interview. DECENT Law Firm — Virtual Asset Practice Group Cases involving Bitcoin and drug transactions in Korea sit at the intersection of criminal law, the Narcotics Control Act, financial regulation, and blockchain forensics. Each charge carries distinct legal elements and requires a tailored defense strategy. DECENT Law Firm's Virtual Asset Practice Group has hands-on experience handling virtual asset-related narcotics investigations from the initial investigation stage through to trial. If you have been contacted by Korean law enforcement or are uncertain about the scope of the allegations against you, we recommend seeking legal advice before your first interview. This article is intended for general informational purposes only and does not constitute legal advice for any specific case or individual situation.
2026-05-20 Naver Blog -
Blogs Crypto
Involved in a USDT Exchange Transaction in Korea?
Legal Risks of Crypto OTC Transactions, Money Laundering Allegations, and Accomplice Liability Some individuals become involved in USDT (Tether) exchange transactions in Korea believing they are simply helping with a private crypto transfer or OTC deal, only to later find themselves under investigation for fraud, money laundering, or violations of Korean financial regulations. In recent years, Korean investigative authorities have increasingly focused on crypto-based money laundering structures connected to voice phishing, investment scams, illegal gambling operations, and overseas criminal organizations. As a result, even participants who were not part of the original scam may become subject to criminal investigation if they are found to have handled, converted, or transferred suspicious funds. This article explains the key Korean laws, court precedents, and investigative standards commonly applied in USDT exchange cases involving alleged accomplice liability or concealment of criminal proceeds. Why USDT Is Frequently Used in Money Laundering Schemes USDT (Tether) is a stablecoin pegged to the U.S. dollar and is widely used because of its relatively stable value and fast cross-border transfer capability. However, these same characteristics also make USDT attractive to criminal organizations seeking to move or conceal illegally obtained funds. In Korea, investigative authorities have recently uncovered multiple cases where proceeds from voice phishing or investment fraud were converted into USDT and transferred to overseas wallets or cash-out channels. In March 2026, for example, Seoul Jungnang Police announced the arrest of 19 individuals involved in laundering fraud proceeds through USDT conversion schemes linked to overseas criminal groups, with approximately KRW 6 billion in criminal assets seized. Under Korea’s Act on Reporting and Use of Certain Financial Transaction Information (commonly referred to as the “Special Financial Transactions Act” or “Special Act”), anti-money laundering obligations primarily apply to registered Virtual Asset Service Providers (VASPs). As a result, OTC crypto transactions conducted privately between individuals often become a gray area where the participant’s knowledge and intent become the central legal issue. Major Korean Laws That May Apply 1) Fraud Accomplice Liability Under the Korean Criminal Act If a person is found to have participated in the movement, exchange, or delivery of funds obtained through fraud, Korean prosecutors may investigate whether that person acted as: a joint principal offender (co-principal), or an aider and abettor (accessory) under Articles 30 and 32 of the Korean Criminal Act. The key issue is whether the participant knowingly assisted the fraudulent scheme or merely engaged in what appeared to be an ordinary transaction. 2) Act on Regulation and Punishment of Criminal Proceeds Concealment One of the most commonly applied statutes in these cases is Korea’s Act on Regulation and Punishment of Criminal Proceeds Concealment. The law criminalizes conduct such as: disguising the acquisition or disposition of criminal proceeds, concealing the origin of criminal proceeds, or hiding or transferring criminal assets. In practice, converting fraud proceeds into cryptocurrency, cashing out USDT, or transferring funds through third-party wallets may all be viewed by investigators as potential money laundering activity. The central legal question is usually whether the person handling the transaction knew — or at least should have suspected — that the funds were connected to criminal activity. 3) Korean Special Financial Transactions Act (Crypto Business Registration Issues) Individuals who repeatedly exchange USDT or conduct OTC crypto transactions for commission-based profit may also face allegations of operating an unregistered virtual asset business. Korean authorities generally look at factors such as: repeated or continuous transactions, receipt of commissions or service fees, dealing with multiple counterparties, and operation resembling a commercial exchange service. A one-time transaction between acquaintances is treated differently from ongoing exchange activity conducted for profit. 4) Foreign Exchange Transactions Act In some cases, Korea’s Foreign Exchange Transactions Act may also become relevant. This typically arises where funds are transferred internationally, including situations involving overseas wallets, offshore entities, or cross-border settlement structures. If the transaction occurred solely between domestic parties using Korean won, investigators may focus more heavily on money laundering or crypto regulatory issues rather than foreign exchange violations. However, international transfer structures may trigger additional scrutiny. The Most Important Legal Issue: “Willful Blindness” or Implied Criminal Intent One of the most important legal concepts in these investigations is whether the participant had criminal intent — including so-called “willful blindness” or implied awareness. The Korean Supreme Court has ruled as follows: To punish a person for concealing criminal proceeds, it is sufficient that the person recognized the property as criminal proceeds in general terms; it is not necessary for the person to know the exact type or details of the underlying crime. — Korean Supreme Court Decision 2006Do5288, Jan. 11, 2007 This means that even if someone claims: “I did not know it was voice phishing money,” or “I thought it was related to tax avoidance or gambling,” criminal liability may still arise if the person recognized that the funds were likely illegal in some form. Importantly, Korean courts may separately recognize liability for concealing criminal proceeds even where accomplice liability for the original fraud itself is disputed. The two offenses are legally distinct. Factors Korean Investigators Commonly Use to Infer Criminal Awareness Investigative authorities do not rely solely on direct admissions. Instead, they often infer intent based on the overall transaction structure. Common factors include: ▪️Unofficial OTC Transaction Methods Transactions conducted outside registered exchanges or through private channels are often viewed as higher-risk structures. ▪️Repeated Transactions Repeated dealings using similar methods may be interpreted as evidence that the participant understood the suspicious nature of the activity. This may also support allegations of operating an unregistered crypto business. ▪️Excessive Commissions or Fees Receiving unusually high compensation compared to ordinary exchange fees may be treated as evidence of awareness of illegal risk. ▪️Lack of Identity Verification Transactions involving anonymous parties, unverifiable identities, or disappearing counterparties may raise additional suspicion. ▪️Blockchain Transaction Analysis Because cryptocurrency transfers are recorded on the blockchain, Korean authorities increasingly use blockchain forensic analysis to trace fund flows and identify links between victim funds and crypto wallets. Where several of these factors appear together, prosecutors may argue that the participant at least “implicitly recognized” the illegal nature of the funds. Defense Strategy: Explaining Why Criminal Awareness Did Not Exist In these cases, simply stating “I did not know” is rarely enough. Because Korean courts broadly recognize implied criminal intent, the defense must often demonstrate — through objective facts and evidence — why the person could not reasonably have recognized the funds as criminal proceeds. Important factors may include: how the relationship with the counterparty developed, why the transaction appeared legitimate at the time, whether there were objective warning signs, how the transaction was explained to the participant, and whether statements remain consistent with blockchain records and messaging history. Early-stage responses are particularly important because investigators often already possess substantial transaction data before conducting interviews. An inconsistent or poorly prepared initial statement may later be used to strengthen suspicions. In addition, allegations involving fraud accomplice liability, criminal proceeds concealment, crypto business registration issues, and foreign exchange violations each involve different legal elements. Identifying the actual scope of potential liability at an early stage is therefore critical. Decent Law Firm | Digital Asset & Crypto Investigation Team USDT-related investigations in Korea often involve complex issues extending beyond ordinary crypto transactions, including blockchain tracing analysis, accomplice liability, money laundering regulations, crypto compliance obligations, and foreign exchange law. At Decent Law Firm, our digital asset and crypto investigation team has experience handling cryptocurrency-related investigations from the initial investigation stage through criminal trial proceedings. If you have been contacted by Korean investigative authorities or are unsure about the allegations being raised, careful early-stage legal review is strongly recommended. This article is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-05-19 Naver Blog -
Blogs Corporate & Biz
Toxic Clauses in Investment Agreements: Key Red Flags Startup Founders Must Check
The outcome of an investment deal is often determined by the information gap between a founder reviewing their first investment agreement and an investor who has negotiated dozens of them before. Common Investment Documents: SPA, SHA, and Term Sheet When startups raise investment, they usually encounter three core legal documents. ▪️Share Purchase Agreement (SPA) The SPA is the primary agreement governing the investor’s acquisition of newly issued shares. It typically covers investment amount, valuation, closing conditions, representations and warranties, and other key transaction terms. ▪️Shareholders’ Agreement (SHA) The SHA regulates the relationship among shareholders after the investment closes. This document often contains the provisions that most directly affect a founder’s control over the company and future exit strategy, including voting rights, board control, transfer restrictions, drag-along rights, and veto rights. ▪️Term Sheet The term sheet summarizes the core investment terms before the definitive agreements are signed. Although parts of a term sheet may be non-binding, it often becomes the framework for the final contracts. In practice, negotiating leverage decreases significantly once the term sheet is signed. Four Toxic Clauses Founders Frequently Overlook ▪️Liquidation Preference Liquidation preference gives investors the right to recover their investment — sometimes more than their original investment — before founders receive any proceeds in an acquisition, merger, or liquidation event. The economic impact depends heavily on: The multiple (1x, 2x, etc.) Whether the preference is participating or non-participating In some cases, founders may receive little to no proceeds even after a successful exit if the liquidation structure heavily favors investors. ▪️Anti-Dilution Protection Anti-dilution clauses protect investors if future financing rounds occur at a lower valuation. The most aggressive version is the “Full Ratchet” mechanism, which can severely dilute founder ownership. More balanced structures typically use a “Weighted Average” adjustment method instead. Founders should carefully review: Trigger conditions Calculation formula Scope of protected securities ▪️Drag-Along Rights Drag-along provisions allow majority shareholders or investors to force minority shareholders to sell their shares under the same terms during a company sale. Without carefully drafted protections, founders may be forced into an exit they do not support. Key issues to negotiate include: Minimum approval thresholds Minimum sale price Founder consent rights Protection against unfavorable deal structures ▪️Reserved Matters and Investor Veto Rights Reserved matters clauses require investor approval for certain company decisions. While some level of oversight is standard, overly broad veto rights can significantly restrict day-to-day management and strategic flexibility. These provisions sometimes extend beyond major corporate actions and into operational matters such as: Hiring decisions Annual budgets Business expansion New product launches Overly expansive veto rights can effectively undermine founder control. Founder Protection Clauses That Should Not Be Missing Reviewing toxic clauses is only part of the process. Equally important is ensuring that the agreement includes provisions protecting the founder’s long-term position. ▪️Tag-Along Rights Tag-along rights allow founders or minority shareholders to participate in a share sale initiated by major investors or controlling shareholders under the same terms and conditions. This prevents founders from being left behind in a partial exit transaction. ▪️Reasonable Non-Compete Restrictions Non-compete clauses are common, particularly when investors are concerned about founder departures. However, the scope must remain reasonable in: Duration Geographic coverage Industry definition Overly broad restrictions can make it difficult for founders to launch future ventures or continue working in their own field. ▪️Flexible Use of Investment Funds Some investment agreements impose rigid limitations on how capital can be spent. Excessively narrow restrictions may prevent startups from pivoting or adapting to market conditions. Maintaining flexibility in operational spending categories is often critical for early-stage companies. Why Startup Founders Should Involve a Lawyer Early Investment agreement review is not simply about proofreading a contract. A startup investment lawyer should help with: Identifying and negotiating toxic clauses Structuring founder protection provisions Anticipating future fundraising and exit scenarios Preparing negotiation strategies against investor revisions Balancing governance and operational flexibility Most importantly, legal review should begin at the Term Sheet stage. Once a founder signs a term sheet, investors often treat the agreed terms as commercially settled, making it far more difficult to renegotiate key provisions later in the process. In many startup investments, the best time to negotiate is before signing anything — not after.
2026-05-15 Naver Blog -
Blogs Criminal
Undercover Drug Investigations Approved in Korea: What Changes in Drug Crime Investigations?
Korea’s Drug Investigation System Is Changing In May 2026, South Korea passed legislation allowing undercover investigations for drug crimes, signaling a major shift in how narcotics cases will be investigated and prosecuted. On May 11, 2026, the Korean National Police Agency officially launched a dedicated Task Force (TF) to prepare for the implementation of undercover drug investigations. The TF is expected to establish investigative guidelines, operational manuals, and staffing systems before the law takes effect after the required implementation period. Until now, most drug investigations in Korea relied on reports, surveillance, raids, and digital forensics. Under the new system, however, investigators may legally conceal their identities and directly participate in transactions as part of undercover operations. The framework is expected to apply to both online and offline drug crimes, particularly those involving encrypted messaging apps, darknet marketplaces, and organized distribution networks. Online Drug Transactions May Become Much Easier to Detect According to Korean law enforcement authorities, drug-related arrests have continued to increase, with online drug crimes growing particularly rapidly. Previously, investigators often faced difficulties identifying upper-level distributors because many narcotics operations were conducted anonymously through Telegram, darknet platforms, cryptocurrency payments, and decentralized delivery structures. With undercover investigations now becoming legally available, investigators may pose as buyers, couriers, or intermediaries in order to infiltrate entire distribution networks. As a result, even individuals who believed they were involved only in personal use or small-scale purchases may unexpectedly become subjects of broader investigations. Situations that may now carry significantly higher legal risk include: Attempting to purchase drugs through Telegram or anonymous chat platforms Cryptocurrency-based drug payments Acting as a delivery intermediary or proxy recipient Participating in group purchases Facilitating introductions between buyers and sellers Investigators may now be able to secure direct evidence during the transaction process itself. What This Means for Drug Crime Suspects in Korea 1. The Other Party May Be an Undercover Investigator Under the new framework, investigations will no longer rely solely on tips or accidental detection. Investigators may directly engage in conversations, negotiations, payments, or delivery arrangements while operating undercover. Chat logs, transfer records, delivery information, and meeting arrangements may all become evidence. In some cases, the person communicating with a suspect may actually be a law enforcement officer. 2. Evidence May Become Much Stronger Evidence obtained through undercover operations often includes direct recordings of the transaction process itself, such as: Chat conversations Audio recordings Screenshots Controlled purchases Surveillance footage Because of this, simply denying involvement may become significantly more difficult than before. In many cases, the focus of defense strategy shifts toward explaining the extent of involvement, level of participation, intent, and mitigating circumstances. 3. Investigations May Expand Beyond Simple Possession or Use Korean investigators are increasingly focusing on entire distribution chains rather than only end users. A person initially investigated for simple drug use may later face allegations involving transportation, brokerage, storage, or distribution depending on the evidence collected during the investigation. The distinction between personal use and distribution-related conduct can significantly affect sentencing outcomes under Korean criminal law. Early Legal Response Is More Important Than Ever In Korean drug cases, the initial statement given to investigators can have a major impact on the entire case. This becomes even more critical when undercover operations have already secured substantial evidence before the suspect is contacted. At that stage, legal strategy often focuses not only on the alleged conduct itself, but also on mitigating factors such as: Degree of involvement Whether the individual is a first-time offender Voluntary cooperation Admission of facts Rehabilitation and treatment efforts Lack of commercial intent Personal circumstances and background Because early statements can be difficult to reverse later, consulting a criminal defense lawyer before questioning is often extremely important. If You Have Been Contacted by Korean Investigators Drug investigations in Korea are becoming more sophisticated, technology-driven, and proactive. Undercover investigations may substantially increase the likelihood of evidence collection during online transactions and communication stages. In some situations, conduct initially believed to involve only personal use may later develop into broader allegations involving supply or facilitation. The criminal defense team at Decent Law Firm assists both Korean and foreign clients facing drug-related investigations in Korea, including investigation response strategy, interview preparation, evidence review, sentencing mitigation, and overall criminal defense representation. If you have been contacted by investigators or are facing a drug-related issue in Korea, seeking legal advice at an early stage may significantly affect the outcome of the case.
2026-05-15 Naver Blog -
Blogs Criminal
Pre-Trial Detention Hearing Strategy in Korea: Why You Need a Criminal Defense Lawyer Immediately
A detention warrant request is not the end of an investigation — in many cases, it is the moment that determines the direction of the entire criminal case. In Korea, once prosecutors request a detention warrant, the court usually conducts a pre-trial detention hearing within approximately 48 hours. What happens during this short window can significantly affect whether the suspect remains free or is taken into custody. Only 48 Hours to Prepare A Korean pre-trial detention hearing (often referred to as a warrant review hearing) is a procedure where a judge directly questions the suspect before deciding whether detention is necessary. Within this limited timeframe, the defense team must quickly: review the investigation status, meet the detained suspect, analyze statements and evidence, prepare written submissions, organize supporting materials, and develop a hearing strategy. In practice, many detention decisions are heavily influenced by the preparation completed before the hearing even begins. What Korean Courts Focus on in Detention Hearings Korean courts generally evaluate three core issues when deciding whether to issue a detention warrant. 1. Risk of Flight The court considers whether the suspect may avoid future investigation or trial proceedings. Stable residence, employment, family ties, and long-term connections to Korea can become important factors supporting release. 2. Risk of Evidence Tampering Judges also examine whether the suspect may destroy evidence, influence witnesses, or coordinate statements with related parties. If major evidence has already been secured and the suspect has cooperated with investigators, these points may help reduce concerns about detention necessity. 3. Seriousness of the Alleged Crime The court reviews the severity of the allegations, potential repeat offenses, financial damage, and overall case structure. At the same time, factors such as victim compensation efforts, settlement discussions, remorse, or legal disputes regarding the allegations may also be considered by the court. A criminal defense lawyer structures the defense strategy around these exact legal standards rather than relying on emotional appeals alone. A Detention Hearing Lawyer Does Much More Than Attend Court Effective defense in detention cases is usually built before the hearing date. ✔️ Immediate Client Interview and Statement Review The lawyer meets the suspect as quickly as possible to understand the case structure, prior statements made to investigators, and any inconsistencies or legal risks that may affect the hearing. ✔️ Written Opinions and Supporting Materials Defense counsel prepares written submissions explaining why detention is unnecessary. These materials may include: proof of residence, employment records, family relationship documents, medical conditions, cooperation history, transaction records, contracts, or communication evidence relevant to the allegations. The quality and organization of these submissions can directly affect the judge’s perception of the case. ✔️ Hearing Preparation and Statement Strategy During the hearing, suspects are questioned directly by the judge. Answers given during this process can significantly influence the outcome. An experienced lawyer helps prepare how key facts should be explained, which issues require caution, and how to maintain a consistent legal position throughout the hearing. ✔️ Planning for Possible Detention Even before the hearing concludes, the defense may also prepare follow-up measures such as detention review requests, bail applications, or additional legal filings if detention is ultimately granted. Early Defense Is Especially Important in Financial and Crypto-Related Cases Cases involving cryptocurrency, investment disputes, fraud allegations, voice phishing, OTC crypto transactions, or financial crimes are often highly technical and document-heavy. Simply claiming innocence is rarely enough. The defense must clearly explain transaction structures, fund flows, business relationships, and the suspect’s actual role in a way the court can realistically understand within a short hearing. In multi-party investigations, statements made by co-defendants or related individuals can also create additional risks at the detention stage. For foreign nationals living in Korea or international business operators, these risks may become even more serious due to language barriers, visa concerns, or misunderstandings regarding Korean criminal procedures. Detention Is Not a Conviction — But It Changes Everything A detention warrant does not mean guilt has been proven. However, actual detention can severely affect: preparation of the defense, business operations, employment, immigration status, family life, and psychological stability. There is a substantial practical difference between defending a criminal case while free and defending it while detained. If you have been contacted by Korean investigators or informed that a detention warrant may be requested, immediate legal review is strongly recommended. The criminal defense team at Decent Law Firm handles detention hearings, financial crime investigations, cryptocurrency-related criminal matters, and complex economic crime cases involving both Korean and foreign clients in Korea. Early action often shapes the outcome.
2026-05-14 Naver Blog -
Blogs Crypto
Foreign Exchange Transactions Act Investigations in Korea: What to Do If You Are Linked to Crypto-Based Illegal Remittance or OTC Currency Exchange
Many people become involved in foreign exchange investigations without realizing the legal risks in advance. What began as a simple request to exchange money, send funds overseas, or trade USDT through a Telegram OTC channel can quickly escalate into an investigation involving Korea’s Foreign Exchange Transactions Act, AML regulations, or the Special Financial Transactions Act. In recent years, Korean authorities have significantly strengthened enforcement against crypto-based illegal remittance schemes, particularly those involving OTC brokers, P2P transfers, and unregistered foreign exchange operations. Why Crypto P2P and OTC Transactions Can Become a Legal Issue in Korea The use of crypto assets such as USDT (Tether) for cross-border payments and private currency exchange transactions has rapidly increased. Common examples include: Sending overseas tuition or living expenses through unofficial crypto channels Receiving local currency abroad after transferring crypto domestically P2P USDT trading arranged through Telegram or KakaoTalk open chat rooms OTC transactions designed to avoid banking procedures or remittance restrictions Not every crypto P2P transaction is automatically illegal. However, Korean authorities may view the activity as a violation of the Foreign Exchange Transactions Act when certain factors are present. 1. Repetitive or Business-Like Activity Repeated transactions, exchange commissions, or ongoing OTC activity may be interpreted as operating an unregistered foreign exchange business. 2. Use of Unregistered Exchange Channels Trading crypto through unlicensed OTC brokers or informal exchange operators creates substantial legal risk under Korean financial regulations. 3. Involvement in “Hwanchigi” (Illegal Remittance Networks) Korean investigators closely monitor schemes that bypass formal banking systems to move funds across borders. Even users — not only operators — may become subjects of investigation if authorities believe they knowingly participated in the structure. Korean courts often distinguish sharply between one-time private transfers and repeated commercial-style exchange activity. Why Enforcement Has Become Much Stronger Recently Crypto-related financial investigations in Korea have intensified due to stricter AML and virtual asset regulations. 1. Expanded Travel Rule Requirements Recent amendments to Korea’s AML framework strengthened obligations to record and share sender/receiver information for virtual asset transfers. As compliance requirements expand, transaction tracing has become significantly easier for authorities and exchanges. 2. Exchange Monitoring Systems (FDS) Korean crypto exchanges now operate advanced Fraud Detection Systems (FDS) that actively monitor: Repeated deposits and withdrawals Suspicious OTC patterns Linked account activity Abnormal transaction flows Cross-border fund movement indicators Suspicious activity may be reported to the FIU or investigative agencies. 3. Blockchain Tracking and Wallet Analysis Once investigators identify a wallet connected to an illegal exchange operation, blockchain analytics tools can trace connected wallets and transaction histories across multiple users. Transactions once believed to be “anonymous” are now frequently traceable through on-chain analysis. Can You Be Punished Even If You Did Not Know It Was Illegal? Possibly, yes. Under Korean law, simply claiming that you “did not know” the activity was illegal does not automatically eliminate criminal liability. Investigators and courts may still recognize “willful blindness” or implied awareness in situations such as: Using unofficial financial channels despite recognizing they were not normal banking services Accepting unusually favorable exchange rates or fees Repeated or high-volume transactions Failing to verify the identity or legitimacy of the OTC counterparty Transactions involving unregistered Virtual Asset Service Providers (VASPs) may also trigger AML concerns, suspicious transaction reporting obligations, or money laundering scrutiny. Ultimately, whether criminal liability exists depends on factors such as: Transaction frequency Transaction size Level of awareness Degree of participation Relationship with the operator or intermediary What To Do If Korean Investigators Contact You In crypto-related foreign exchange investigations, the initial response can significantly affect the outcome of the case. ✔️ Respond Carefully to Voluntary Submission Requests or Search Warrants Before voluntarily submitting phones, wallets, transaction records, or chat logs, it is important to understand the scope and legal implications of the request. If a search and seizure occurs, individuals should consider: Securing a copy of the warrant Confirming the scope of seizure Recording on-site procedures where legally appropriate Requesting legal counsel participation ✔️ Prepare Statements Carefully Unprepared explanations such as: “A friend told me to do it” “I did not know it was illegal” “I was only helping someone exchange money” may later be interpreted unfavorably. The transaction background, purpose, and level of awareness should be organized carefully with supporting records before making detailed statements. ✔️ Preserve Transaction Records Important evidence may include: Exchange deposit/withdrawal history Bank transfer records Telegram or KakaoTalk conversations Wallet addresses and TxIDs Overseas remittance requests Early evidence preservation often becomes critical in crypto-related investigations. ✔️ Review Your Legal Position Liability differs substantially depending on whether the person is viewed as: A simple user A repeated participant A broker or intermediary An operator of the exchange structure The distinction between passive use and active participation is often one of the key legal issues in Korean investigations. Early Legal Response Matters in Korea Crypto OTC and Illegal Remittance Cases Korean authorities are aggressively investigating crypto-based illegal remittance, OTC exchange activity, and unregistered foreign exchange operations. As AML regulations, Travel Rule enforcement, and blockchain tracing systems continue to expand, the likelihood of detection has increased significantly. Whether a transaction violates Korean law depends on multiple factors, including intent, structure, frequency, and transaction purpose. Early responses — especially regarding statements and evidence submission — can strongly influence the direction of the investigation. Decent Law Firm advises clients on crypto-related criminal investigations, Foreign Exchange Transactions Act matters, AML compliance issues, and virtual asset regulatory risks in Korea.
2026-05-14 Naver Blog -
Blogs Crypto
AI Crypto Scam: What to Do If You Cannot Withdraw Your Funds
As interest in artificial intelligence continues to grow, crypto scammers are increasingly using “AI-powered investment platforms” and “AI trading systems” to attract investors. These scams often appear sophisticated. They may provide polished whitepapers, fake AI trading dashboards, technical presentations, and fabricated success stories to create the illusion of legitimacy. At first, small withdrawals may work normally. However, once a larger amount is invested, victims frequently encounter withdrawal restrictions and repeated requests for additional payments. For foreign investors living in or interested in Korea, understanding these patterns early can make a significant difference in preserving evidence and responding effectively. What Is an AI Crypto Scam? An AI crypto scam is a type of cryptocurrency fraud where scammers falsely claim to operate AI-based trading technology, automated investment systems, or advanced blockchain algorithms in order to obtain investor funds. Unlike older crypto scams that relied mainly on unrealistic profit promises, AI-related scams tend to look far more convincing because they use technical language and complex-looking systems that ordinary investors cannot easily verify. Common examples include: “AI automated trading” platforms Fake AI investment algorithms AI-powered coin analysis systems Fabricated development teams and partnerships Telegram or KakaoTalk investment groups promoting “AI-selected coins” In many cases, the underlying technology either does not exist at all or consists only of publicly available open-source tools presented as proprietary AI technology. Common Types of AI Crypto Scam Schemes Fake AI Technology and Whitepapers Scammers often publish professional-looking whitepapers filled with technical terminology, charts, and fake development roadmaps. Before investing, investors should carefully review: Whether the developers are real people LinkedIn profiles and professional history GitHub repositories and development activity Whether partnerships and investors actually exist Many fraudulent projects use fabricated team members or copied technical materials. Presale Investment Fraud Another common scheme involves selling tokens before a supposed exchange listing. Victims are told they are receiving a “special presale opportunity” before the token is listed on major exchanges such as Upbit or Binance. Typical warning signs include: Guaranteed future listings Promises of “100x returns” VIP insider investment opportunities Claims of limited early-access token allocations In reality, many projects disappear entirely after collecting investor funds. Fake Exchanges and AI Trading Platforms Some scammers direct victims to private trading apps or fake exchanges operated entirely by the fraud group. The structure often follows the same pattern: Small withdrawals are allowed initially Investors are encouraged to deposit larger amounts Withdrawals become restricted Additional fees are demanded Communication suddenly stops Requests to install unofficial apps or use unknown platforms should be treated with extreme caution. Signs That You May Already Be a Victim If any of the following situations apply, additional transfers should be stopped immediately. Requests for Taxes or Verification Fees One of the most common scam tactics is demanding advance payment before withdrawals are processed. Victims may be told they must pay: Taxes Wallet activation fees AML verification costs Security deposits International transfer charges Legitimate exchanges generally do not require separate personal transfers in order to release withdrawal funds. Financial Authority Impersonation Some scammers pretend to represent regulators, compliance teams, or financial institutions. They may falsely claim that: Your account has been flagged for money laundering Additional compliance checks are required Korean financial authorities are reviewing the transaction A temporary security payment must be made These are frequently used to pressure victims into sending more money. Continuous Withdrawal Delays Scammers often use technical excuses to delay withdrawals, including: Wallet maintenance Node synchronization problems Security upgrades Hacking attempts International approval delays Repeated postponements are a major warning sign. Sudden Loss of Communication Victims often report that customer service suddenly disappears after additional payments are refused. In many cases: Telegram administrators block users Support responses become automated Account managers disappear entirely Websites or apps suddenly shut down What To Do If You Are a Victim of an AI Crypto Scam 1. Stop Sending Additional Money No matter what explanation is provided, additional payments should not be made. Scammers frequently exploit victims psychologically by claiming that “one final payment” will unlock the withdrawal process. In practice, additional deposits usually lead only to larger losses. 2. Contact Your Bank Immediately If the transfer was recent, contact your bank as quickly as possible and explain that the transaction may involve fraud. Unlike voice phishing cases, crypto-related fraud may not always qualify for immediate account suspension under Korean law. However, early reporting can still help preserve transaction records and improve response options. Obtaining a police incident confirmation document may also assist in certain cases. 3. Preserve All Evidence The following materials should be saved immediately: Whitepapers and advertisements Wallet addresses and transaction records Screenshots of the platform Telegram, KakaoTalk, or email conversations Voice recordings and investment solicitations Contracts or investment documents Because fraudulent platforms can disappear without warning, early evidence preservation is critical. 4. Report the Case and Seek Legal Advice AI crypto scams may involve multiple legal issues, including: Fraud Illegal fundraising schemes Financial regulatory violations Money laundering-related offenses Electronic financial transaction violations Many scams also involve overseas entities, cross-border fund transfers, and anonymous crypto wallets, making early strategic response especially important. The longer the delay, the more difficult asset tracing and evidence collection may become. Early Response Can Make a Difference AI crypto scams are not simply failed investments. In many cases, they involve organized fraudulent operations designed to systematically prevent withdrawals and extract additional payments from victims. If withdrawals have been blocked or communication has stopped, it is important to review the situation carefully and respond quickly. Decent Law Firm’s digital asset and crypto disputes team advises clients on crypto investment fraud, asset tracing, criminal complaints, and cross-border legal response strategies related to cryptocurrency scams in Korea. Even with limited initial materials, it may still be possible to assess the structure of the case and discuss available legal options.
2026-05-13 Naver Blog -
Blogs Criminal
AI Investment Scams in Korea: Common Tactics and What Victims Should Do
If phrases like “AI-powered trading,” “AI stock recommendations,” or “AI-managed investment platforms” sound trustworthy, that is exactly what scammers are relying on. Recently, investment fraud schemes using AI-related marketing have rapidly increased in Korea and overseas. Many scams now combine fake AI trading systems, deepfake celebrity endorsements, fabricated profit dashboards, and fake news articles to make fraudulent platforms appear legitimate. For foreign residents, overseas investors, and expatriates living in Korea, these scams can be especially difficult to identify because the platforms often imitate real Korean financial services or use Korean-language media branding to create credibility. This article explains how AI investment scams typically operate, what warning signs to watch for, and what legal steps victims should consider in Korea. What Is an AI Investment Scam? An AI investment scam refers to a fraud scheme that claims to use artificial intelligence, automated trading algorithms, or machine-learning technology to generate investment profits. In many cases, the “AI system” either does not exist at all or performs no real trading activity. Instead, scammers use technical jargon and fake performance data to convince victims that profits are being generated automatically. Unlike traditional investment fraud that simply promises high returns, AI investment scams exploit public trust in advanced technology. Because most investors cannot independently verify how AI systems actually work, the fraud often goes undetected until substantial losses occur. Some operations even impersonate legitimate financial companies, fintech businesses, or investment professionals to appear more credible. Common Types of AI Investment Scams One of the most common tactics involves so-called AI automated trading platforms. Victims are told that an AI system continuously analyzes the market and guarantees stable monthly profits. In reality, early investors may receive small payouts to build trust before larger deposits are requested. Another rapidly growing issue is the use of deepfake videos featuring celebrities, economists, or business figures. Fraudsters use AI-generated voice and facial synthesis technology to create fake endorsement videos promoting fraudulent investment platforms. These videos are frequently distributed through YouTube, Instagram, Telegram, KakaoTalk, and other social media channels. Scammers also create fake investment websites that closely resemble legitimate exchanges or financial news outlets. Some schemes use fabricated news interviews or cloned media websites to make the platform appear trustworthy. Victims are often shown fake account dashboards displaying large profits generated by “AI trading.” However, when they attempt to withdraw funds, the operators demand additional payments for taxes, authentication fees, security deposits, or account verification. Once additional money is sent, communication is typically cut off. How to Identify AI and Deepfake Investment Fraud As deepfake and AI technologies become more sophisticated, it is now more important to verify the source of information rather than relying only on visual impressions. If a celebrity, financial expert, or company appears in an advertisement, investors should confirm the partnership through official websites or verified social media accounts. Fraudulent advertisements frequently misuse public figures without authorization. Fake news articles are another major warning sign. Scammers often clone the design of well-known Korean media outlets and publish fabricated interviews promoting investment platforms. Investors should carefully review the actual domain address and compare it with the legitimate news website. It is also important to verify whether the company is properly registered with Korean financial regulators. Businesses offering investment advisory or discretionary investment services in Korea may require regulatory registration depending on the structure of the service. Promises such as “guaranteed returns,” “risk-free profits,” or “principal protection” should also be treated with extreme caution. Under Korean financial regulations, guaranteed investment profits are heavily restricted and frequently associated with illegal schemes. What Victims Should Do Immediately If you suspect that you are dealing with an AI investment scam, the first priority is to stop sending additional funds immediately. Scammers commonly claim that extra payments are required to unlock withdrawals, pay taxes, verify accounts, or complete compliance checks. These demands are often part of the fraud itself. Victims should contact their bank as quickly as possible to request a payment suspension or fraud report. In Korea, rapid action can sometimes improve the chances of freezing funds before they are transferred further. Evidence preservation is also critical. Victims should immediately save and back up: Chat and messenger conversations Transaction and remittance records Screenshots of the platform and account balances Advertisements and promotional videos Website URLs and account information Because many operators use overseas servers, borrowed accounts, or cryptocurrency transfers, early evidence collection and prompt reporting are extremely important. In serious cases, criminal complaints, account tracing procedures, and civil recovery actions may need to proceed simultaneously to maximize the possibility of recovering funds. AI Does Not Change the Legal Nature of Fraud Although these scams use modern technology and sophisticated marketing tactics, the underlying legal issues remain largely the same. Under Korean law, AI investment scams may involve criminal fraud, illegal fundraising schemes, violations of financial regulations, and other financial crimes. The use of deepfake technology and overseas infrastructure simply makes investigation and recovery more difficult. The earlier victims respond, preserve evidence, and seek legal guidance, the higher the likelihood of preventing additional losses and improving recovery options. Decent Law Firm advises clients on AI investment scams, deepfake-related fraud, cryptocurrency-related investment schemes, and cross-border financial crime matters in Korea.
2026-05-12 Naver Blog -
Blogs Crypto
Crypto Delisting Injunctions in Korea After WEMIX: What Courts Actually Examine
Delisting Decisions Are Increasing Faster Than New Listings Korean virtual asset exchanges are tightening their listing maintenance standards more aggressively than ever before. Recent regulatory reviews by Korean financial authorities show that the number of delisting decisions and “investment warning” designations continues to rise alongside stricter compliance expectations imposed on exchanges. For crypto projects, this means that exchange delisting is no longer viewed as a rare or exceptional event. It has become a practical legal and operational risk that must be managed from the early stages of project governance. As a result, injunction filings against exchange delisting decisions have become one of the most important emergency legal remedies available to blockchain projects operating in Korea. What Is a Delisting Injunction in Korea? When a Korean exchange decides to terminate trading support for a token, the affected project may file a court injunction seeking suspension of the delisting decision. The purpose of the injunction is typically to: temporarily stop the delisting from taking effect, delay the trading termination schedule, secure time for additional explanations or negotiations, and prevent irreversible market damage before a full lawsuit is resolved. Korean courts generally examine three core issues during these proceedings. 1. Existence of a Protectable Right The court reviews whether the project has any legally protectable right to continued listing or trading support under: listing agreements, exchange policies, operational guidelines, or principles of fair administrative procedure. 2. Urgency and Irreparable Harm The project must show that immediate delisting would cause damage that cannot easily be reversed later. Potential factors may include: collapse of token liquidity, reputational damage, disruption to global exchange relationships, investor panic, or serious operational harm to the project ecosystem. 3. Abuse of Discretion by the Exchange Korean courts generally recognize that exchanges have broad discretion regarding listing and delisting decisions. However, projects may still challenge a decision if there are indications of: inconsistent application of internal standards, insufficient opportunity to respond, vague or unclear reasoning, procedural unfairness, or arbitrary decision-making. How the WEMIX Case Changed Korean Court Practice Earlier Korean delisting disputes occasionally resulted in injunctions being granted when exchanges failed to provide sufficient procedural fairness. For example, courts previously viewed the following issues critically: lack of concrete explanation, inadequate notice, failure to provide meaningful clarification opportunities, or inconsistency between published standards and actual enforcement. However, after the WEMIX litigation, Korean courts have shown a much stronger tendency to respect the autonomy and expertise of exchanges. Since then, courts have been more reluctant to interfere where exchanges can demonstrate objective concerns such as: circulation discrepancies, security incidents, governance instability, operational transparency concerns, or sustainability risks. In practice, this means that simply arguing “the delisting is unfair” is rarely sufficient today. Projects must instead build a highly structured argument supported by objective evidence, procedural analysis, and technical documentation. What Crypto Projects Should Prepare Immediately After a Delisting Notice • Review Listing Agreements and Exchange Policies Projects should carefully compare the exchange’s actual actions against its published rules and contractual obligations. In Korean litigation, arguments regarding inconsistency or violation of the exchange’s own standards can become an important issue. • Organize the Entire Communication Timeline All communications related to the warning designation and delisting review process should be preserved, including: emails, official notices, response submissions, meeting records, clarification requests, and compliance materials. Procedural fairness often becomes one of the central battlegrounds in injunction proceedings. • Prepare Data-Driven Rebuttal Materials A large portion of recent Korean delisting cases involve “project risk” concerns. Accordingly, projects should prepare objective supporting materials such as: on-chain circulation data, treasury management records, security audit reports, governance documentation, development progress, and operational sustainability evidence. Korean courts increasingly expect evidence-based explanations rather than broad or abstract arguments. Delisting Injunctions Require Early Strategic Preparation Korean virtual asset regulation and exchange compliance standards are becoming significantly stricter each year. At the same time, courts are now more inclined to respect exchange discretion following the WEMIX precedent. For this reason, successful injunction strategies require far more than emergency filings alone. Projects must carefully analyze procedural issues, technical evidence, governance structures, disclosure practices, and exchange compliance standards from the outset. Decent Law Firm advises blockchain projects, crypto foundations, and virtual asset businesses on Korean exchange delisting disputes, injunction proceedings, compliance risks, and regulatory strategy.
2026-05-11 Naver Blog
