Crypto

Non-Prosecution (No Charges) in Crypto Copy Trading Fraud Allegations

Non-Prosecution Decision (No Charges Filed)

Case Overview

Client Information: Individual / Suspect

Case Details: The Digital Assets Practice Group at Decent Law Firm represented a client who had been accused of fraud and violations of the Act on the Protection of Virtual Asset Users in connection with crypto copy trading services.

The client, while working at a cryptocurrency investment company, introduced spot and futures trading strategies and explained a copy trading service to the complainant, whom he had met through a YouTube channel. The complainant later signed up with an exchange and participated in the copy trading program. After incurring investment losses, the complainant filed a criminal complaint, alleging that the client had deceived him from the outset with the intent to collect fees without any genuine intention to generate profits.

The client consistently maintained that he had repeatedly disclosed the risks of investment, the leveraged trading structure, and the applicable fee system, and that there had been no intent to deceive or misappropriate funds.

Decent's Strategy

✔️ Comprehensive Analysis and Structuring of KakaoTalk Conversations
We conducted a detailed review of extensive chat records and identified key exchanges demonstrating clear disclosure of investment risks, fee structures, and the principle of investor self-responsibility.
Rather than submitting raw data, we strategically structured the evidence to demonstrate the absence of fraudulent intent.

✔️ Separation of Legal Issues and Submission of Defense Briefs
We distinguished between fraud allegations and potential violations of virtual asset regulations, addressing each issue independently with tailored legal arguments.
In particular, regarding alleged unfair trading practices, we clarified—through statutory interpretation—that no actual trading activity attributable to the client had occurred, and submitted this analysis to the investigative authorities.

✔️ Preparation and Representation During Police Interview
Prior to the client’s interview, we developed a clear and consistent statement strategy covering fee structures, trading mechanisms, and the allocation of investment decision-making responsibility.
Our attorneys attended the interview to ensure consistency and credibility in the client’s statements.

Results & Significance

"Non-Prosecution Decision (No Charges Filed)"

The authorities decided not to refer the case for prosecution, citing insufficient evidence.
They considered several factors, including the inherent uncertainty of cryptocurrency investments, evidence that the complainant was aware of the associated risks, and communications demonstrating an understanding of the copy trading structure.
Based on these findings, the authorities concluded that investment losses alone could not substantiate a fraud offense.

As cryptocurrency investments become more widespread, disputes arising from losses are increasingly being framed as criminal fraud cases. This is particularly common in complex structures such as copy trading, leveraged trading, and derivatives.
If you are facing a crypto-related investigation in Korea, early legal intervention and a properly structured defense strategy can be critical.
For experienced counsel in digital asset-related criminal matters, contact Decent Law Firm.

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All consultations are conducted after a case review by the attorney in charge.
Providing the key details of your case in advance will help you receive more specific advice.

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