Legal Advisory on a Contract for Crypto Arbitrage Infrastructure Consulting Services
Case Overview
- Client Information
- Corporate / Business Entity
- Case Details
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The client, a virtual asset consulting service provider (Mr. A), requested legal review and drafting of a consulting agreement for a service designed to help customers build an environment for cryptocurrency arbitrage between domestic and overseas exchanges.
The service structure included guidance on exchange account operation, procedures for overseas remittances, and education on automated trading programs so that customers could independently conduct arbitrage trading.
Crypto arbitrage services may involve multiple overlapping regulatory frameworks, including the Foreign Exchange Transactions Act, the Capital Markets Act, and the Act on Reporting and Use of Certain Financial Transaction Information (AML Act). If the contractual structure is improperly designed, it may expose the service provider to potential criminal or administrative risks, such as unregistered foreign exchange services, illegal investment advisory activities, or violations of the Act on the Regulation of Conducting Fund-Raising Business Without Permission (similar to illegal deposit-taking schemes).
To ensure regulatory compliance and minimize potential disputes with customers, the client sought legal assistance from Decent Law Firm’s Digital Asset Team.
Decent's Strategy
1. Compliance Review under the Foreign Exchange Transactions Act
The agreement was structured to confirm that remittances conducted through licensed small-sum overseas remittance service providers fall within the permitted scope under the Foreign Exchange Transactions Act Enforcement Decree.
Any activities that could constitute unregistered foreign exchange business were explicitly excluded from the service scope.
2. Clarification of Service Scope and Non-Investment Advisory Nature
The contract clearly excludes services such as the installation or operation of automated trading programs, execution of transfers, or any involvement in investment decision-making.
It explicitly states that all trading decisions and transaction executions are made solely at the customer’s discretion and responsibility, preventing the service from being classified as investment advisory or discretionary investment management.
3. Liability Limitation and Disclaimer Provisions
The agreement includes provisions stating that no guarantees are made regarding profits or principal, and establishes a liability cap along with disclaimers for losses arising from the customer’s regulatory violations or unlawful activities.
4. Customer Representations and Self-Responsibility Clauses
Representations and warranties were incorporated confirming that the customer has independently reviewed applicable laws and regulations.
The agreement also clarifies that any unlawful conduct related to trading activities is the sole responsibility of the customer, strengthening the client’s defensive position in potential disputes.
Results & Significance
Through the advisory services of Decent Law Firm’s Digital Asset Team, the client was able to secure a contractual framework that confirms regulatory compliance while minimizing potential disputes with customers.
Consulting services related to crypto arbitrage operate in a high-risk regulatory environment where multiple financial regulations intersect. Even a single clause in a contract can determine whether a business model may be interpreted as unregistered financial activity or an illegal fundraising scheme.
Before launching your service, ensure that your contractual structure is legally sound.
If you require legal review of a cryptocurrency consulting agreement, contact Decent Law Firm’s Digital Asset Team.
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