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Crypto Fraud & AML Act Violation Case

Crypto Fraud & AML Act Violation Case

Client Information
Individual / Suspect
 
Case Details

A virtual asset investment platform operator sold certain cryptocurrency tokens to retail investors. The tokens were marketed at prices significantly lower than the prevailing market price, with promotional claims suggesting that substantial profits could be expected once the tokens were listed on a Korean cryptocurrency exchange.

However, the token prices later collapsed, and the anticipated exchange listing never materialized. As a result, numerous investors filed criminal complaints alleging fraud and illegal virtual asset business operations.

Investigators viewed the token sales structure as a potential violation of Korea’s Act on Reporting and Use of Certain Financial Transaction Information (commonly referred to as the “Special Financial Transactions Act” or “AML Act”), particularly the registration requirements applicable to virtual asset service providers (VASPs).

The authorities launched a broad investigation involving dozens of individuals, including employees engaged in token sales activities.

Our clients were sales employees working for the platform operator. Although they had no ownership or managerial authority, they were suspected of participating in an organized crypto fraud scheme and sought legal assistance from Decent Law Firm’s Digital Asset Team.

Decent's Strategy
✔️ Full Participation During Police Interrogations
Our attorneys accompanied the clients throughout the investigative process from the earliest stage of the case, ensuring that their procedural rights were protected and preventing inaccurate or unnecessarily incriminating statements.


✔️ Detailed Analysis of the Token Sales Structure
We demonstrated that the clients acted merely as employees under the direction and supervision of management and had no practical authority over the operation, structure, or decision-making of the platform.
The defense focused on distinguishing the clients from the actual operators and organizers of the business.


✔️ Legal Arguments Regarding the AML Act
Our legal team conducted a detailed analysis of the statutory definition of a virtual asset service provider under Korean law, along with relevant precedents and regulatory interpretations.
We argued that simple sales employees who neither controlled nor operated the business could not be treated as regulated VASPs subject to criminal liability under the AML framework.


✔️ Comprehensive Review of Investigation Records
Because the investigation involved a large number of suspects and extensive records, we conducted a thorough review of the evidence to clarify the limited scope of the clients’ involvement and the absence of criminal intent.
We emphasized that the clients lacked awareness of any alleged illegality and did not participate in managerial or financial decision-making.
Outcome
"Non-Prosecution Decision"

The investigative authorities ultimately issued a non-prosecution decision (case dismissed without referral for indictment) regarding the alleged violations of the Special Financial Transactions Act.

The authorities concluded that the clients were merely employees acting under managerial instructions and could not readily be classified as virtual asset business operators. The investigators further determined that the available evidence was insufficient to establish criminal liability solely based on participation in token sales activities.


In Korean crypto-related investigations, being a lower-level employee does not automatically eliminate the risk of criminal liability.

Investigators often treat virtual asset fraud cases as organized crimes and tend to broaden the scope of their investigations aggressively. Without a properly structured legal defense at the initial stage, individuals may be unfairly treated as accomplices and exposed to serious criminal penalties.

If you are being investigated for alleged violations of Korea’s AML regulations, crypto fraud, or participation in a virtual asset investment scheme, early legal analysis can significantly affect the outcome of the case.

The Digital Asset Team at Decent Law Firm provides strategic defense for cryptocurrency investigations, exchange-related disputes, AML compliance issues, and virtual asset regulatory matters in Korea.
#Korea crypto fraud lawyer # Special Financial Transactions Act Korea # virtual asset AML Korea # crypto investigation defense Korea # Korean cryptocurrency regulation

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