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Police Non-Referral DecisionCrypto
Fraud Allegations Involving a Crypto Trading Signal Room and Referral Program — Case Closed Without Referral to Prosecutors
The client worked for a company that provided cryptocurrency-related information and was responsible for assisting prospective members with registration and access to an overseas crypto exchange. After receiving guidance from the client, the complainant joined a Telegram-based crypto trading signal room and opened an account with an overseas exchange in their own name. The complainant then conducted leveraged futures trading and transferred tens of millions of Korean won to third-party accounts to purchase USDT for use in those trades. After suffering trading losses, the complainant filed a criminal complaint for fraud. The complainant alleged that the client had guaranteed the principal and investment returns and had conspired with the USDT sellers to obtain the funds under false pretenses. As a result, the client was investigated on suspicion that introducing the signal room and connecting the complainant with a USDT seller formed part of a fraudulent scheme.
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Delivery of the Final English Sponsorship AgreementCrypto
USDT Sponsorship Agreement Review and Successful Contract Execution with an Overseas Participant
The client was preparing a digital asset industry event in Korea and planned to enter into booth operation and sponsorship agreements with domestic and overseas exchanges, projects, and other participating companies. The sponsorship package included booth space, speaking sessions, logo placement, media exposure, and other promotional benefits. The sponsorship fee was structured to be paid in USDT, while Korean value-added tax was to be invoiced and paid separately in KRW. Before circulating the agreement to potential participants, the client requested a legal review of the USDT payment structure, wallet transfer risks, VAT conversion method, control over unlawful promotional content, and the refund and cancellation terms applicable to sponsors.
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Delivery of Reviewed AgreementCrypto
Digital Wallet Development and Delivery Agreement Review and Copyright Ownership Advisory
The client is a company preparing to launch a blockchain-based digital wallet service in Korea. It planned to engage an external developer to build the initial version of the service and subsequently proceed with commercialization, further development, and ongoing operation. The draft agreement covered the development of the digital wallet, delivery of source code, test builds, API documentation, account transfers, system handover, and training support. Before entering into the agreement, the client requested a legal review of the contractual terms, particularly those concerning ownership of the deliverables, acceptance procedures, and milestone payments.
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Delivery of Reviewed AgreementCrypto
USDT Escrow Payment Agency Agreement Review and Advisory on Payment Structure
The client planned to pay development fees to an overseas developer using USDT. Under the proposed structure, the USDT would be transferred to a third-party payment agent, which would convert or liquidate the virtual assets into Korean won and deliver the payment to the developer. The arrangement was structured as a separate ancillary agreement limited to the custody and payment of funds, rather than as part of the underlying development agreement. Before entering into the agreement, the client requested a legal review of the payment agent’s regulatory status and the potential risks arising from the conversion and payment process under Korean law.
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Non-Referral DecisionCrypto
Crypto OTC Exchange Operator Cleared of Fraud Accomplice Allegations, Including Illegal Fund-Raising and Electronic Financial Transactions Act Charges
The client was engaged in crypto OTC exchange transactions, a form of direct peer-to-peer exchange conducted outside a centralized exchange platform. In this case, the complainant had followed the guidance of an investment advisory group and transferred Korean won to the client’s personal bank account on two occasions. After deducting an agreed exchange fee, the client transferred the corresponding amount of virtual assets to the wallet address designated by the complainant. When the complainant later suffered investment losses, the complainant filed a criminal complaint not only against the investment advisory group but also against the client, alleging that the client had acted as an accomplice in the alleged investment fraud. As a result, the client was investigated for fraud, violation of the Act on the Regulation of Conducting Fund-Raising Business Without Permission, and violation of the Electronic Financial Transactions Act.
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Legal Opinion and Terms of Use Revision AdvisoryCrypto
Legal Review of a Virtual Asset Automation Program and Terms of Use Revision Advisory Completed
The client was a company developing and providing an automation program for users of a blockchain-based platform. The program was designed to automatically claim token rewards periodically available to users and to procure the gas or transaction fees required for such on-chain transactions by using assets held in the users’ own wallets. Users connected their virtual asset wallets to the program, and the program executed repetitive on-chain processes such as reward claims and swaps based on conditions pre-set by the users. The client requested Decent Law Firm to review whether the service would be subject to virtual asset service provider, or VASP, registration requirements under Korea’s Specific Financial Information Act and the Virtual Asset User Protection Act. The client also requested a review of whether its existing Terms of Use could create legal or regulatory risks.
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Police Non-Referral DecisionCrypto
Crypto Referral and USDT OTC Exchange Fraud Accomplice Allegations: Police Non-Referral on All Charges
Our client was primarily engaged in a crypto referral business and also handled USDT P2P and OTC exchange transactions. The client was accused by an alleged victim of investment fraud and was criminally reported for three charges: fraud, violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, and violation of the Electronic Financial Transactions Act. The complainant claimed to have suffered substantial losses after being encouraged to invest in cryptocurrency through an online investment community. The complainant then identified our client as an accomplice, alleging that our client had processed the USDT OTC exchange for the investment funds. The complainant argued that our client had conspired with the operators of the investment community, participated in the fraudulent scheme, and provided a bank account or access medium while knowing that it would be used for criminal purposes.
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Police Non-Referral DecisionCrypto
Case Result: Non-Prosecution Due to Insufficient Evidence in a Cryptocurrency Investment Fraud Case
The client was employed by a company and was responsible for recommending cryptocurrency investments to potential customers under the company's instructions. The process was relatively straightforward. The client contacted customers by phone, introduced cryptocurrency investment opportunities, and explained that investors would receive both their principal and profits once returns were generated. One day, however, a customer contacted the client claiming that the promised payment date had passed and that neither the invested funds nor the profits had been returned. Shortly thereafter, the client was contacted by the police and received a summons to appear for questioning as a suspect in a cryptocurrency investment fraud investigation. Although the client had merely performed assigned job duties, he unexpectedly found himself under criminal investigation for fraud. Recognizing the difficulty of responding to the investigation alone, the client retained Decent Law Firm for legal representation.
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Legal Review Memorandum and Revised Terms of Use Pro...Crypto
Legal Review of Terms of Use for a Crypto Auto-Trading Program
The client operated a blockchain-based automated swap transaction service and requested a legal review and revision of its Terms of Use. The service was designed to automatically execute transactions from users’ own wallets. It adopted a non-custodial structure, meaning that the operator did not directly hold, manage, or control users’ virtual assets. However, the existing Terms of Use did not clearly explain the non-custodial nature of the service or the operational independence of the platform. Several provisions also contained wording that could cause misunderstandings regarding wallet integration, private key handling, and the fee structure. The lack of clarity in the Terms of Use could potentially be used as an unfavorable factor when assessing whether the service falls under the definition of a Virtual Asset Service Provider under Korea’s Act on Reporting and Using Specified Financial Transaction Information, or whether it could be viewed as an investment discretionary service under the Financial Investment Services and Capital Markets Act.
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Legal Opinion ProvidedCrypto
Regulatory Review of an Overseas Crypto Exchange Referral Business: Whether VASP Registration Was Required in Korea
The client was operating a referral-based business involving an overseas virtual asset exchange. Under the business model, the client published and promoted a referral code issued by the overseas exchange through its own website, blog, YouTube channel, and other online channels. When users signed up for the exchange using the referral code and conducted transactions, the client received referral fees from the exchange as marketing or advertising compensation. The client requested a comprehensive legal review on whether this business structure could fall within the definition of a virtual asset service provider under Korea’s Act on the Protection of Virtual Asset Users, thereby triggering a reporting obligation under the Act on Reporting and Using Specified Financial Transaction Information. The client also sought practical guidance on content wording, advertising practices, and the management of external collaborators such as bloggers and influencers.
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No-Charge DecisionCrypto
No-Charge Decision in a Crypto Copy Trading Investment Consulting Fraud Case
Our client worked as a sales representative at a virtual asset investment consulting company. His role was to guide customers through the process of registering with an overseas cryptocurrency exchange and to explain how futures trading and copy trading worked. The fee structure was performance-based. The company would receive a portion of the customer’s profits only if profits were generated. After the customer suffered investment losses, the customer filed a criminal complaint alleging fraud. The complainant claimed that the recommended exchange was a fabricated program designed to display false profits, and that the company had solicited the investment from the beginning with the intent to misappropriate the funds. As a result, our client was summoned by the investigative authorities as a suspect in a fraud case.
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Provision of a Legal Review MemorandumCrypto
Legal Advisory on an Overseas Incorporation Structure for a Virtual Asset Auto-Trading Service
DECENT Law Firm was retained by a startup operating a subscription-based auto-trading software service that connects to virtual asset exchange APIs and executes algorithm-based trading strategies. The client had already incorporated a Korean entity and was preparing to expand its service to non-Korean users. Before launching the service more broadly overseas, the client sought legal advice on where to establish an overseas entity and how to structure transactions between the Korean entity and the foreign entity.
