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법률정보Illegal Crypto OTC Trading in Korea: Investigation Risks for Users
In June 2026, the Financial Services Commission (FSC) and the Korea Financial Intelligence Unit (KoFIU) announced that 12 suspected illegal virtual asset operators had been referred to the police following a joint investigation by DAXA and registered virtual asset service providers. According to the announcement, the investigation identified 8 illegal over-the-counter (OTC) crypto dealers and 4 overseas exchanges suspected of conducting business targeting Korean users without proper registration. These operators allegedly attracted users through Telegram, websites, open chat rooms, Korean-language services, KRW payment support, and domestic marketing activities. The Korean financial authorities have also warned that users of unregistered virtual asset service providers may face unexpected disadvantages, including being subject to investigation during the process of verifying counterparties and the source of funds. This article explains the key legal risks that may apply to users of illegal crypto OTC channels in Korea and how investigative authorities may assess the user’s knowledge and intent. Key Laws That May Apply Under Korea’s Act on Reporting and Using Specified Financial Transaction Information, commonly referred to as the Specified Financial Information Act, virtual asset service providers must report to KoFIU before conducting business in Korea. An operator that conducts virtual asset business without proper reporting may be subject to criminal penalties under Article 17 of the Act, including imprisonment of up to 5 years or a fine of up to KRW 50 million. In principle, the direct target of punishment under this provision is the unregistered business operator. However, depending on the circumstances of the transaction, users may also be investigated under other laws. Category Key Issue Potential Penalty Article 3(1) of the Act on Regulation and Punishment of Criminal Proceeds Concealment Disguising the acquisition or disposition of criminal proceeds, disguising the origin of criminal proceeds, or concealing criminal proceeds Imprisonment of up to 5 years or a fine of up to KRW 30 million Article 4 of the Act on Regulation and Punishment of Criminal Proceeds Concealment Receiving criminal proceeds while aware of the relevant circumstances Imprisonment of up to 3 years or a fine of up to KRW 20 million Article 17 of the Specified Financial Information Act Operating an unregistered virtual asset business Imprisonment of up to 5 years or a fine of up to KRW 50 million For ordinary users, direct liability for violating AML obligations under the Specified Financial Information Act is generally limited. In actual investigations, however, authorities tend to focus more closely on the source of funds, the identity of the counterparty, the transaction pattern, and the reason for using an OTC channel instead of a registered exchange. Key Legal Issue: The User’s Knowledge Illegal crypto OTC channels are often considered high-risk because they can make fund flows difficult to trace. For this reason, they may be misused for converting or concealing funds related to crimes such as narcotics, illegal gambling, phishing, or other fraud. In these cases, the key issue is whether the user knew, or could reasonably be seen as having known, that the funds were criminal proceeds or that the transaction structure was abnormal. The Supreme Court of Korea has held that, for a violation of the Criminal Proceeds Concealment Act, it is sufficient for the person to recognize that the property in question constitutes criminal proceeds. The person does not necessarily need to know the exact type or details of the underlying crime. Supreme Court Decision 2006Do5288, January 11, 2007 In other words, even if the user did not know the specific crime involved, intent may still be recognized if the user was aware that the funds were illegal in nature. Therefore, simply saying that the user did not know the operator was unregistered may not be enough. The user must be able to explain, based on the transaction history and structure, why there was no reasonable basis to suspect illegality. Circumstances Investigators May Review When it is difficult to directly confirm a user’s intent, investigative authorities may infer the user’s knowledge from the surrounding circumstances. Common factors include: · Use of unofficial trading channels Trading through Telegram channels, open chat rooms, or private OTC groups instead of registered exchanges. · Repeated or continuous transactions Using the same method over a long period of time or conducting multiple transactions. · Unclear source of funds Difficulty identifying where the funds came from or who the true counterparty was. · Abnormal conditions compared to registered exchanges Using a structure that allows KRW payments, fast conversion, or trading without proper identity verification. Authorities usually do not rely on a single factor alone. Instead, they assess the overall transaction period, frequency, amount, channel characteristics, and fund flow to determine whether the user may have recognized the illegality of the transaction. Decent Law Firm Virtual Asset Practice Group Investigations involving users of illegal crypto OTC channels often involve multiple legal issues at the same time, including violations of the Specified Financial Information Act, the nature of the transaction funds, and whether the user had knowledge of criminal proceeds. Decent Law Firm’s Virtual Asset Practice Group has advised and represented clients in matters involving unregistered virtual asset service providers, OTC crypto transactions, and criminal proceeds concealment allegations from the early stages of investigation. If you have been contacted by the police or prosecutors in Korea, or if you are unsure about the nature of the allegations, it is important to review your transaction history and response strategy before attending any investigative interview. Source: Financial Services Commission, Press Release on Caution Against Using and Trading with Illegal Virtual Asset Operators, June 24, 2026 This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-26 -
언론보도
Polymarket and Illegal Gambling in Korea: Can Users Face Criminal Charges?
Background of the Polymarket Investigation Polymarket is an overseas prediction market platform where users trade on the probability of future events, such as election results, economic indicators, and policy decisions. From a user’s perspective, Polymarket may appear closer to an investment platform or an information-based trading service than a conventional gambling site. However, the fact that a platform operates overseas does not automatically exclude the possibility of criminal liability under Korean law. If a user accesses the platform from Korea, deposits cryptocurrency such as USDC, and gains or loses money depending on the outcome of future events, Korean investigative authorities may review whether the conduct constitutes gambling under the Korean Criminal Act. Recent reports indicate that the Gangwon Provincial Police Agency’s Cyber Investigation Division has been investigating Korean Polymarket users on suspicion of gambling. The police are reportedly identifying users by tracing cryptocurrency transfers from domestic virtual asset exchanges. In other words, the belief that an overseas service is lawful abroad does not necessarily mean that using the service from Korea is also free from criminal risk. Elements of Gambling Under Korean Criminal Law Article 246 of the Korean Criminal Act provides punishment for gambling and habitual gambling. A person who gambles may be punished by a fine of up to KRW 10 million. If the conduct is considered habitual gambling, the punishment may be imprisonment for up to three years or a fine of up to KRW 20 million. Under Korean Supreme Court precedent, gambling is generally understood as an act of risking property or economic value and determining gain or loss by chance. Whether Polymarket use satisfies these elements may depend on the following factors. Element Application to Polymarket Key Issue Economic value Users deposit stablecoins such as USDC and may earn profits Relatively clear Chance User analysis may be involved, but the result depends on external events Core issue Temporary amusement exception Article 246 provides an exception for mere temporary amusement Depends on frequency and scale The Key Issue: Chance The most important legal issue is whether Polymarket trading involves “chance” in the sense required for gambling under Korean law. The Korean Supreme Court has held that even where a participant’s skill or ability affects the outcome, gambling may still be found if the result is influenced, even in part, by circumstances of chance. Supreme Court Decision 2006Do736, decided October 23, 2008 This means that even if a user analyzes political, economic, or market information before making a prediction, the fact that the final outcome depends on external events outside the user’s control may still raise a gambling-law issue. This is likely one of the reasons investigative authorities may view Polymarket differently from ordinary financial investment. At the same time, there does not yet appear to be a publicly confirmed final court or prosecution decision in Korea directly addressing whether Polymarket use itself constitutes gambling. An investigation or summons does not mean that a user has already been found guilty. The legal assessment may vary depending on the user’s specific circumstances, including how and why the platform was used. Key Points for Users Under Investigation In a Polymarket-related investigation, the following issues should be carefully reviewed. 1. Use of the platform and criminal liability are separate issues The existence of cryptocurrency transfer records does not automatically mean that gambling has been legally established. Admitting that a platform was used is different from admitting that the conduct satisfies the legal elements of gambling. 2. The user’s purpose and understanding matter It is important to explain why the user accessed Polymarket, how the user understood the service, and whether the user reasonably perceived it as a prediction market or investment-like platform. This should be organized before attending a police interview. 3. The temporary amusement exception may need to be reviewed Under Article 246 of the Korean Criminal Act, conduct that is merely temporary amusement may be excluded from punishment. Whether this exception may apply depends on the number of transactions, the amount involved, the period of use, and the overall pattern of activity. 4. Records should be preserved If investigative authorities have already obtained on-chain transaction data or exchange deposit and withdrawal records, deleting or modifying materials may be interpreted unfavorably. Rather than altering records, users should preserve relevant materials and organize the facts accurately. How Decent Law Firm Can Assist Polymarket-related gambling investigations require a combined understanding of virtual asset transactions, Korean gambling law, and criminal investigation strategy. Decent Law Firm’s virtual asset team has practical experience in handling early-stage investigations involving Polymarket and other overseas crypto-related platforms. If you have received a summons or are concerned that your Polymarket activity may become subject to investigation in Korea, it is important to review your legal position before confirming or attending a police interview. Early legal review can help determine which facts should be clearly explained, which legal issues may be disputed, and how to avoid statements that could be misunderstood during the investigation. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-19 -
법률정보
Accomplice Liability in Drug Cases Involving Privacy Coins: Dark Coins, Crypto Payments, and Investigation Risks in Korea
Why Are Privacy Coins Used in Online Drug Transactions? Monero (XMR), Zcash (ZEC), and similar assets are commonly referred to as privacy coins or “dark coins.” Unlike Bitcoin or Ethereum, where transaction records are generally visible on public blockchains, Monero is designed to make it difficult to identify the sender, recipient, and transaction amount through technologies such as ring signatures and stealth addresses. For this reason, Monero and other privacy-focused assets are sometimes used in online drug transactions, including transactions arranged through Telegram, dark web forums, and social media platforms. However, the fact that a transaction is difficult to trace does not mean that it is beyond the reach of law enforcement. Korean investigative authorities do not rely solely on on-chain transaction data. They may also review Telegram messages, mobile device forensic data, statements from sellers and buyers, exchange records, fiat conversion history, and other evidence to identify those involved in the transaction. In other words, privacy coins may make an investigation more complex, but they do not make an investigation impossible. Key Korean Laws That May Apply In drug-related cases involving privacy coins, multiple laws may apply depending on the person’s role and level of involvement. Legal Basis Main Conduct Covered Possible Penalty Narcotics Control Act, Article 60(1)2 Sale, brokerage, receipt, possession, or use of certain psychotropic substances, including substances classified under Schedules B or C Imprisonment for up to 10 years or a fine of up to KRW 100 million Narcotics Control Act, Article 58(1)3 Manufacturing, import/export, sale, brokerage, receipt, or possession for such purposes of Schedule A psychotropic substances Life imprisonment or imprisonment for at least 5 years Act on Reporting and Using Specified Financial Transaction Information Operating a virtual asset business without the required VASP registration Imprisonment for up to 5 years or a fine of up to KRW 50 million Act on Regulation and Punishment of Criminal Proceeds Concealment Concealing or disguising proceeds from drug-related crimes Imprisonment for up to 5 years or a fine of up to KRW 30 million Even if a person did not directly sell or possess drugs, liability may still arise if they connected buyers and sellers, facilitated payment flows, exchanged virtual assets, or helped conceal criminal proceeds. In addition, if a person operates an over-the-counter (OTC) virtual asset service without proper registration and the service is used to process drug-related funds, separate issues may arise under Korea’s anti-money laundering and virtual asset regulations. The applicable law and potential penalty will depend on the type of substance involved, the exact conduct, whether the conduct was repeated, whether any compensation was received, and whether the person knew or should have known the criminal nature of the transaction. Crypto-Related Drug Investigations Are Expanding in Korea Drug transactions in Korea are increasingly moving from offline channels to online platforms such as Telegram, dark web marketplaces, and social media. According to media reports citing Korean police data, from January to April 2026, 9.2% of all drug offenders were reported to have used virtual assets. This was higher than the annual figure of 8.4% recorded in the previous year. The proportion of online drug offenders has also continued to rise. Media reports indicate that the figure increased from 24.0% in 2021 to 42.0% during the January–April 2026 period. Korean authorities are also strengthening their investigative infrastructure. In 2026, the Ministry of Science and ICT and the Korean National Police Agency began promoting a project to develop an integrated investigation system linking dark web activity, virtual asset transaction tracing, and online drug advertisement monitoring. The police have also established dedicated virtual asset investigation teams in major regional police agencies, including Seoul, Busan, Incheon, Gyeonggi Nambu, and Gyeongnam. As a result, crypto-related drug investigations in Korea are no longer limited to the question of whether a coin transaction can be traced on-chain. Investigators may analyze online communications, wallet and exchange records, fiat conversion records, device forensics, transaction patterns, and statements from co-suspects together. Using a Privacy Coin Does Not Prevent Accomplice Liability In a Korean drug investigation, the key issue is not simply the payment method. The more important question is how the person was involved in the drug transaction. The Narcotics Control Act does not only punish direct sales. It may also punish inducement, solicitation, brokerage, receipt, possession, use, importation, and manufacturing, depending on the substance and conduct involved. For example, methamphetamine is generally treated as a Schedule B psychotropic substance under Korean law. If a person sells, brokers, receives, possesses, or uses methamphetamine, Article 60(1)2 of the Narcotics Control Act may apply, which provides for imprisonment of up to 10 years or a fine of up to KRW 100 million. If the case involves importation or manufacturing of methamphetamine, a more serious provision may apply. Under Article 58(1)6 of the Narcotics Control Act, manufacturing or importing/exporting certain Schedule B psychotropic substances may be punishable by life imprisonment or imprisonment for at least 5 years. This means that the applicable charge can vary significantly depending on whether the conduct involved simple use, possession, sale, brokerage, aiding and abetting, importation, or manufacturing. Therefore, if you are contacted by Korean law enforcement, the first question should not be “Which coin was used?” but rather “What specific charge is being investigated?” Why “I Only Introduced the Parties” May Not Be Enough In many cases, suspects say: “I did not sell the drugs myself.” “I never touched the drugs.” “I only shared a Telegram link.” “I only helped connect two people.” However, Korean drug laws do not only target the final seller. If a person connects a buyer and a seller, directs someone to a sales channel, shares sales posts, helps arrange payment, or receives a commission after the transaction, the conduct may be viewed as brokerage or aiding and abetting. The following circumstances may increase legal risk: Repeatedly sharing Telegram channel links Connecting potential buyers to sellers Receiving a commission after a transaction Receiving the commission in Monero or another virtual asset Maintaining repeated contact with buyers or sellers Being named in a statement by an arrested seller or buyer In particular, receiving compensation in a privacy coin may be interpreted as an attempt to avoid detection. As a result, saying “I only introduced the parties” may sometimes help explain limited involvement, but it can also be used as evidence that the person knowingly participated in the transaction structure. What Evidence Do Korean Investigators Review? In privacy coin drug cases, Korean investigators generally do not rely on blockchain data alone. They may review the following types of evidence. First, they may review Telegram, KakaoTalk, Discord, or other messaging records. Even if the server is located overseas, messages, deleted data, files, images, contact information, and login records may be recovered through forensic analysis if a mobile phone or computer is seized. Second, they may rely on statements from co-suspects. If a seller or buyer is arrested first, the person may identify intermediaries, brokers, or payment facilitators during questioning. In that situation, even someone who was not present at the actual transaction may become a suspect. Third, they may review virtual asset and exchange records. Even if the privacy coin itself is difficult to trace, exchange registration records, deposit and withdrawal history, fiat conversion records, and transactions involving other virtual assets may still be reviewed. Fourth, they may assess repetition and compensation. A one-time message may be viewed differently from repeated introductions, repeated sharing of sales channels, or commission-based involvement. Whether the person received payment can significantly affect how the conduct is characterized. Before attending an interview, it is important to distinguish between what the investigators may already have and what the person’s actual role was. What to Check Before Attending a Police Interview If you are contacted by Korean law enforcement, it may be risky to immediately state, “I did not know,” or “I did not sell anything.” Early statements are later compared with police interview records, seized digital evidence, forensic results, and statements from co-suspects. If your statement changes or conflicts with other evidence, even limited involvement may be interpreted more unfavorably. Before attending an interview, you should check: The specific charge listed in the summons or notice Whether you are being treated as a suspect or a witness Whether your phone, computer, or other device has been seized The scope of Telegram, KakaoTalk, Discord, or other message records Whether any virtual asset wallet or exchange account was used Whether any seller or buyer has already been arrested Whether any commission or payment was received Whether there is evidence of repeated introductions or referrals Depending on these facts, the case may remain a witness interview, or it may develop into a full criminal investigation involving brokerage, aiding and abetting, or other drug-related charges. Once an interview date is scheduled, it is important to prepare a clear and consistent statement strategy in advance. Early Legal Response Matters in Privacy Coin Drug Investigations Using Monero or another privacy coin does not mean that a person is safe from investigation. Korean authorities are increasingly analyzing online drug transactions through Telegram records, virtual asset transaction structures, exchange and fiat conversion records, forensic evidence, and statements from co-suspects. In drug cases, the applicable law and penalty can vary significantly depending on whether the allegation involves use, possession, sale, brokerage, aiding and abetting, importation, or manufacturing. How you explain your role in the transaction, whether you received compensation, and how you respond to digital evidence and co-suspect statements may affect the direction of the case. Decent Law Firm’s criminal defense team assists clients in drug investigations involving virtual assets, digital forensic issues, and alleged accomplice liability. If you have received a police summons in Korea in connection with Monero, privacy coins, Telegram drug transactions, or virtual asset payments, it is important to review your situation before attending the interview. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-15
