Pureun “Ian” Hong
MP ian@decentlaw.ioIan served as criminal law expert at YK Lawfirm, handling various corporate litigations including private fund investments, STOs, and capital markets.
- Criminal
- Class Action
- Crypto
- Real Estate Disputes · Construction
- Entertainment
성공사례
관련소식
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법률정보Cryptocurrency Delisting by Korean Exchanges: What Projects Should Check First
1. Practical Risks of Delisting for Crypto Projects A trading support termination (delisting) by a Korean cryptocurrency exchange is a critical event that can affect both the sustainability of the project and the protection of its investors. Recently, as major Korean exchanges have increasingly designated tokens as “investment caution” and proceeded with delistings, legal disputes initiated by project teams have also been on the rise. From a practical standpoint, delisting is far more than simply losing access to one exchange. Once trading support is terminated, liquidity drops sharply, often leading to a significant decline in asset value. At the same time, investor confidence deteriorates, which can delay or even derail fundraising efforts and strategic partnerships. In many cases, community disengagement follows, threatening the sustainability of the entire ecosystem. 2. Key Legal Issue: Transparency and Predictability of the Process In practice, the main legal challenge is not just the delisting decision itself, but the process leading up to it. Projects frequently raise concerns that exchanges do not provide clear or measurable criteria for maintaining listings after an “investment caution” designation. Even when projects submit requested materials and explanations, some report receiving delisting notices without detailed feedback or meaningful communication. While exchanges are generally granted broad discretion in listing and delisting decisions, that discretion is not unlimited. If the decision-making process appears arbitrary or inconsistent with contractual terms and exchange policies, it may give rise to legal disputes. Ultimately, the key legal questions are whether the procedure was properly followed and whether the decision was reasonable. 3. Legal Remedy: Injunction to Suspend Delisting In response to delisting notices, project teams are increasingly moving beyond public statements and considering formal legal action. One of the primary legal tools is an injunction to suspend the effectiveness of the delisting decision. This allows the project to request that the court temporarily halt the delisting until a final judgment is made. If granted, trading support may continue during the litigation period. However, Korean courts tend to recognize the broad discretion of exchanges in selecting and maintaining listed assets. As a result, injunctions are typically granted only when there are clear procedural defects or evidence of abuse of discretion. This makes it essential for projects to rely on well-organized evidence and legal arguments, rather than general claims or public pressure. 4. Essential Checklist After Receiving a Delisting Notice Upon receiving a delisting notice, projects should immediately organize key materials to establish a legal basis for their position. These include: Listing agreements and trading support contracts Exchange terms of service and listing/maintenance/delisting policies Records of prior “investment caution” designations and responses Documentation of business progress and roadmap execution Compliance efforts, technical development, and security measures Investor protection policies and actions taken Having these materials prepared is crucial not only for negotiations with the exchange but also for any legal proceedings, including injunction filings. 5. Three Critical Points to Review Immediately Delisting cases are highly time-sensitive. Projects should focus on the following: Procedural validity: Was the delisting decision made in accordance with contractual terms and exchange rules? Communication process: Were the exchange’s requirements clearly communicated, and did the project respond adequately? Timing for legal action: Is there sufficient time to file for an injunction before the delisting takes effect? These factors will determine whether negotiation or legal action is the more effective strategy. 6. Early Strategy Determines the Outcome Cryptocurrency delisting disputes require both legal expertise and a deep understanding of the technical and regulatory landscape. Decent Law Firm has advised numerous crypto projects on listing-related legal opinions, regulatory compliance under Korean law (including AML and reporting obligations), and dispute resolution. Our approach focuses on aligning legal strategy with the operational realities of blockchain projects. If your project has received a delisting notice and is facing business or reputational risks, an early legal assessment can significantly impact the outcome. Organizing key facts and seeking timely advice is critical.
2026-04-24 -
법률정보
Criminal Liability for Crypto OTC Transactions in Korea: Proceeds of Crime Concealment & Defense Strategy
“I just sold crypto and received cash.” In practice, this explanation is no longer sufficient to avoid criminal liability in Korea. According to data released by the Korea Customs Service and the Financial Intelligence Unit (FIU) in February 2026, illegal foreign exchange transactions (“hwanchigi”) over the past five years reached KRW 11.5 trillion, with approximately 83% (KRW 9.5 trillion) involving virtual assets. In 2025 alone, suspicious transaction reports (STRs) related to money laundering hit a record high of 1.3 million cases, increasing by 300,000 compared to the previous year. A pending 2026 amendment to Korea’s Anti-Money Laundering regime is expected to expand the Travel Rule to transactions under KRW 1 million and grant the FIU authority to freeze suspicious accounts. Even small OTC crypto transactions are now actively monitored and traceable. 1. How the Act on Concealment of Criminal Proceeds Applies to Crypto OTC Transactions In practice, prosecutions typically arise through the following structures: ▪ Receiving USDT from non-residents and paying KRW domestically This structure may trigger both violations of the Foreign Exchange Transactions Act and the Act on Regulation and Punishment of Criminal Proceeds Concealment. Even if it appears to be a simple exchange service, it can be treated as illegal remittance or money laundering. ▪ “Lack of knowledge” is not always a valid defense Even if the party claims they did not know the counterparty was involved in criminal activity, courts may infer knowledge based on transaction size, frequency, and the use of cash. Korean courts increasingly apply a “should have known” standard based on objective circumstances. ▪ Even intermediary roles can lead to criminal liability Individuals who only handled KRW transfers—without directly trading crypto—have been convicted as accomplices if their actions contributed to the concealment or transfer of criminal proceeds. The key issue is not the form of the transaction, but the overall structure and role within the flow of funds. 2. Penalties — Multiple Laws Apply Simultaneously Crypto OTC cases in Korea rarely involve a single charge. The following statutes are often applied in parallel: ▪ Unregistered Virtual Asset Business (VASP) – Act on Reporting and Use of Certain Financial Transaction Information → Up to 5 years imprisonment or a fine up to KRW 50 million ▪ Acquisition, possession, or disposal of criminal proceeds – Act on Concealment of Criminal Proceeds → Up to 5 years imprisonment or a fine up to KRW 30 million ▪ Unreported foreign exchange transactions – Foreign Exchange Transactions Act → Up to 3 years imprisonment or a fine up to KRW 300 million ▪ Confiscation and forfeiture → Full confiscation or preservation of assets related to criminal proceeds Because these laws can be applied cumulatively, underestimating exposure based on a single charge can lead to serious misjudgment of legal risk. 3. Real Case — KRW 580 Billion OTC Operation Leading to Indictment In a recent case, the operator of an unregistered crypto OTC business was indicted and detained for transactions totaling approximately KRW 580 billion. The case involved the laundering of KRW 23.5 billion in proceeds from crypto fraud, which were used to purchase real estate under borrowed names. Authorities imposed asset preservation measures to secure confiscation. Notably, individuals who did not directly commit fraud but participated in the money flow structure were also prosecuted. The argument that “I only facilitated transfers” was rejected by the court. 4. Defense Strategy — Varies by Investigation Stage Early response is critical in these cases, and the strategy must be tailored to each stage: ▪ Account Freeze Stage Immediate legal review is required to assess grounds for lifting the freeze and limiting asset preservation. Delays can significantly expand the scope of frozen assets. ▪ Summons (Witness/Suspect Stage) Attending an interview alone and providing unstructured answers is highly risky. Statements should be prepared in advance with counsel, focusing on transaction details and knowledge of fund origins. ▪ Submission of Transaction Records Submitting records without legal review may expose unnecessary risks. The scope, format, and explanation of submitted materials should be strategically controlled. A misstep in early statements can directly affect indictment decisions, detention, and confiscation scope. These cases often involve both administrative sanctions and criminal proceedings, requiring a dual-track defense approach. 5. Frequently Asked Questions Q. I only sold crypto and received cash. Can I still be punished? Yes. Depending on the structure, frequency, and source of funds, the transaction may be classified as illegal remittance or money laundering—even if it appears to be a simple sale. Q. I didn’t know the counterparty was involved in crime. Lack of knowledge is a key defense, but authorities often argue that you “should have known” based on objective circumstances. Early legal strategy is essential. Q. What should I do if my account is frozen? You should immediately review the legal basis and explore options for lifting the freeze. Timing is critical. Legal Guidance for Crypto OTC Cases in Korea If you have received notice of an account freeze or contact from an investigative authority, your initial response can significantly impact the outcome. Decent Law Firm’s Digital Asset Team has extensive experience handling crypto OTC, illegal remittance, and USDT-related money laundering cases. Our approach goes beyond criminal defense—we analyze transaction structures and fund flows to build a comprehensive strategy.
2026-04-23 -
법률정보
Crypto API Trading in Korea: Unfair Trading Risks & Regulatory Response Guide
On April 13, 2026, the Financial Supervisory Service (FSS) officially disclosed cases of unfair trading involving crypto API transactions. With approximately 30% of total crypto trading volume now executed via APIs, regulatory scrutiny is increasingly focused on this segment. A common misconception is that using an automated trading program limits personal liability. However, even if trades are executed by an algorithm, legal responsibility remains with the individual who configured and operated the system. Key Unfair Trading Patterns Identified by Korean Regulators The cases identified by the FSS reflect classic market manipulation behaviors that may lead to criminal liability under Korean law. Repeated Small-Volume Trades Executing frequent buy and sell orders in small amounts to artificially inflate trading volume. Spoofing (Order Placement and Cancellation) Placing buy orders and repeatedly canceling them to create a false impression of strong market demand. Wash Trading Across Multiple Accounts Using multiple accounts to trade with oneself in order to simulate market activity or influence price movement. Layering with High-Price Orders Continuously placing buy orders at higher prices to drive the market price upward toward a target level. Importantly, under Korean Supreme Court standards, liability may arise even without actual price impact—mere potential to manipulate the market can be sufficient. This means that even pre-built or third-party trading algorithms may expose users to legal risks if such patterns are executed. Legal Risks Often Overlooked by API Trading Users The Financial Supervisory Service has made it clear that automation does not eliminate accountability. In practice, liability may arise in the following situations: Using trading scripts or bot code obtained from online communities or social media API key leakage allowing third parties to execute unlawful trades under your account Participating—knowingly or unknowingly—in coordinated trading patterns that influence market prices Under the Act on the Protection of Virtual Asset Users, penalties can be severe. Depending on the scale of illicit gains, sanctions may include long-term imprisonment, reflecting the seriousness of such violations. How to Respond if Contacted by the FSS Crypto exchanges in Korea operate automated surveillance systems to detect abnormal trading activity. These findings are reported to the Financial Supervisory Service, and once flagged, a regulatory review may begin. If you are contacted, it is critical to understand that this is not a routine inquiry but the early stage of a formal investigation. ✔️ Request for Transaction Records Do not submit materials without prior legal review. Over-disclosure may broaden the scope of suspicion. ✔️ Request for Appearance or Interview You should attend with legal counsel and prepare a clear, consistent explanation of your trading strategy and system configuration. ✔️ Account Freeze An account freeze is typically a signal that the matter has escalated to a criminal investigation phase. Administrative sanctions and criminal proceedings may proceed in parallel. How Decent Law Firm Approaches These Cases Decent Law Firm’s Digital Asset Team handles cases involving API trading, market manipulation allegations, and violations of Korean crypto regulations. Our approach goes beyond standard defense. We analyze transaction data to identify risk patterns, distinguish between automated execution and user intent, and structure a defense strategy that clearly defines the scope of liability. We also ensure consistency from the earliest stage—especially in document submission and initial statements—so that legal risks do not escalate unnecessarily. If you have been contacted by regulators or are concerned about potential exposure, early-stage legal review is critical. Even if your situation is not fully organized, an initial assessment can significantly impact the outcome.
2026-04-22
