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Media CoverageVirtual asset deposit services face a crisis of mass bankruptcies.
Companies offering so-called 'virtual asset deposit' services, which pay interest by managing deposited virtual assets, are on the brink of collapse, raising alarms. The problem is that it's difficult to pinpoint the cause of this crisis. The virtual asset industry is tense, fearing that the aftermath of this situation could lead to a wave of bankruptcies across the domestic virtual asset market, potentially ushering in a dark period. (omitted) Legal experts point out that users of virtual asset deposit services are at high risk of losing their principal due to the current crisis. Haru Invest, the company at the center of this issue, operates through a foreign entity and is an unregistered business in Korea, meaning it is not under the jurisdiction of the government or financial authorities. Pureun “Ian” Hong, managing partner at Decent Law Firm, stated, "Companies like Haru Invest, which offer virtual asset deposit services, are essentially operated by Koreans domestically but have established foreign entities to avoid government regulation and oversight. While they've exploited this regulatory blind spot, the risks have been borne entirely by the investors," criticizing the situation.
2023-06-15 biz.chosun -
Media Coverage
KakaoTalk neglects misleading banner ads with exaggerated profit claims.
With approximately 41.45 million active users in May, KakaoTalk is indiscriminately attracting gambling-like advertisements to generate banner ad revenue. Particularly, exaggerated advertisements from services like "Random Box" on the Wooju Market suggest that consumers could win luxury items, which calls for special caution from users. (omitted) Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, stated, "Advertising products that are not actually provided as if they can be won through a random box, or omitting negative customer reviews and fabricating false 'satisfied' reviews, violates the Act on the Consumer Protection in Electronic Commerce. This requires caution." Advertising that exaggerates the features of a product to boost sales is considered misleading, and advertisements using information that is not factual are classified as false advertising.
2023-06-12 NBN NEWS -
Media Coverage
Binance and CZ face potential 'criminal penalties' if found guilty of securities fraud.
With the U.S. Securities and Exchange Commission (SEC) filing a lawsuit against Binance, its domestic expansion is now facing significant obstacles. As the possibility of criminal penalties for Binance in the U.S. is being discussed, South Korean financial authorities, currently reviewing the executive change report for Gopax (which Binance acquired), are closely monitoring the situation. (omitted) Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, explained, "Binance is accused of engaging in wash trading, commingling customer assets with corporate funds (potentially embezzlement), and illegally raising funds through the issuance of its own coins (BNB, BUSD) (fraud charges). This makes it criminally problematic, unlike Coinbase." However, Jin added, "Dropil was a case where there was intent to defraud investors from the beginning, but it's unclear in what specific way Binance deceived investors."
2023-06-09 etoday -
Media Coverage
Binance US halts dollar deposits following SEC crackdown; users advised to exercise caution when using the exchange.
Binance has decided to halt dollar deposits and withdrawals in response to the ongoing regulatory crackdown by the U.S. Securities and Exchange Commission (SEC). Binance explained, "The SEC is using extremely aggressive and threatening tactics toward the U.S. digital asset industry," as the reason for halting deposits. (omitted) The domestic virtual asset industry is also closely monitoring the risks stemming from Binance. In particular, attention is being paid to Binance Coin (BNB) and Binance USD (BUSD), which were issued alongside the virtual assets that the SEC considers to be securities. Heybit, a service provider offering virtual asset financial services, announced that it would terminate services related to BNB/BUSD issued by Binance as of the 30th. Some are advising caution when using the exchange, as the SEC has requested an emergency order from a federal court to freeze Binance's assets. Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, stated, "Although this is a cautious and conservative observation, if the asset freeze request is granted, Korean users might find their funds frozen, similar to the FTX incident," adding, "It would be wise for Binance's domestic users to withdraw their assets."
2023-06-09 etoday -
Media Coverage
Binance faces legal action from the SEC following the CFTC.
On the 5th (local time), the U.S. Securities and Exchange Commission (SEC) officially filed a lawsuit against Binance, the world's largest cryptocurrency exchange, and Binance CEO Changpeng Zhao, accusing them of violating securities laws. In the complaint submitted to the U.S. Federal Court, the SEC stated, "Binance violated investor protection rules by operating and selling unregistered exchanges and securities within the U.S." (omitted) Meanwhile, just two months after the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and CEO Zhao for violations of the Commodity Exchange Act (CEA), the SEC has now charged them with securities law violations, signaling an intensifying battle over jurisdiction in the cryptocurrency market. Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, commented, "From the moment the CFTC filed a lawsuit against Binance and CEO Zhao for violating the Commodity Exchange Act, it was only a matter of time before the SEC followed suit. If the court were to rule on the commodity nature of virtual assets first, everything could go awry for the SEC. They likely determined that they could not afford to lose authority and jurisdiction over the virtual asset market."
2023-06-06 Korea Economy -
Media Coverage
Why is money laundering problematic?
Host: Director Han Chi-ho Guest: Pureun “Ian” Hong, managing partner at Decent Law Firm Q. What is money laundering? Money laundering is the process of concealing the illegal origin of funds to make them appear legitimate. Q. What is the origin of the term "money laundering"? The term originates from the 1920s in the U.S. when organized criminals like Al Capone used laundromats to disguise income from illegal activities such as gambling and alcohol sales as legitimate earnings. The term "money laundering" was officially used to define illegal financial transactions in the U.S. Q. Why is money laundering problematic? It allows the use of illegal funds. Virtual assets are increasingly used as a tool for money laundering. Q. Are there examples of cryptocurrency being used for money laundering? Cryptocurrencies have been used to launder money from drug-related crimes. Q. What are some real examples of drug dealers laundering money? Drug dealers use cryptocurrency for payments, often facilitated by platforms like Telegram. They launder funds using methods such as mixing and OTC (Over-The-Counter) transactions. Q. What are "mixing" and "OTC" in the context of money laundering? Mixing: A process where cryptocurrency transactions are mixed to make the transaction history difficult to trace. It involves using multiple wallets to split and combine coins. OTC: Refers to purchasing cryptocurrencies outside of traditional exchanges. Q. Is money laundering through OTC platforms an issue? In the past, OTC platforms were used for legitimate cryptocurrency transactions. Currently, they are often exploited for money laundering purposes. Q. How do drug dealers use OTC platforms for money laundering? They launder money by selling cryptocurrency obtained through illegal activities. Q. Are there other examples of cryptocurrency being used for money laundering? Transferring bank accounts to others can result in violations of the Electronic Financial Transactions Act. Cases have arisen where shell bank accounts and cryptocurrencies were used for money laundering. Q. Are there real cases of shell bank accounts being used for money laundering? A group including a corporate executive was arrested for using shell accounts to launder money. The police warned that transferring bank accounts to others is illegal. There have been cases where cryptocurrencies were purchased via credit card transactions on foreign exchanges and converted to cash through OTC platforms. Q. How are OTC platforms regulated? They can be punished under Article 17, Paragraph 2 of the Special Financial Information Act. Q. Are there other cases of cryptocurrency being used for money laundering? "Kim Nam-guk reportedly converted ₩3 billion ($30 million) through cryptocurrency exchanges, raising suspicions of money laundering." Prosecutors have launched an extensive investigation into the 'Kim Nam-guk coin allegations.' Illegal funds and bribery of public officials, along with other criminal activities, are often facilitated by cryptocurrency. Q. What are the problems with using cryptocurrency for money laundering? The government is working to regulate cryptocurrency money laundering activities.
2023-06-02 NBN NEWS
