Case Studies
Virtual asset-related overseas investment, could there be domestic regulatory issues?
Law firm Veat recently provided legal advice to a domestic company (hereinafter referred to as “the Client”), a new technology business finance company, regarding its investment in an overseas company (hereinafter referred to as “the Target Company”) that holds virtual asset-related licenses and performs businesses such as stablecoin generation, wallet services, and custody services, and regarding the related domestic legal risks and proposed solutions. Specifically, in this case, it was necessary to review whether the investment by ① a new technology business finance company ② an enterprise holding virtual asset-related licenses ③ and, in particular, an overseas enterprise, was lawful. 1. Regulations on New Technology Business Finance Companies 「Specialized Lending Business Act」 Article 1 (Definitions) The meanings of the terms used in this Act are as follows. 14-3. “New Technology Business Finance Company” means an entity registered with the Financial Supervisory Service pursuant to Article 3, Paragraph 2, for new technology business finance. 14-5. “New Technology Business Investment Fund” means a fund established to invest in new technology businesses and is one of the following: a. A fund established jointly by a new technology business finance company and other entities. b. A fund managed and operated by a new technology business finance company A new technology business finance company means an entity that comprehensively performs businesses such as investment, lending, management and guidance of technology for new technology businesses, establishment of new technology business investment funds, and management and operation of funds, and is registered with the Financial Supervisory Service. Such a new technology business finance company must have a certain amount of capital, receive registration from the Financial Supervisory Service, and is subject to the regulations of the Specialized Lending Business Act, including receiving regulations when establishing an investment fund if the entity to be invested in is a new technology business. Law firm Veat reviewed whether the Client had violated the Specialized Lending Business Act as a new technology business finance company and provided legal advice to ensure that the Client's investment in the Target Company complied with the Specialized Lending Business Act. 2. Regulations on Virtual Asset Businesses 「Act on Reporting and Use of Specific Financial Transaction Information」 (hereinafter “Specific Financial Transaction Information Act”) Article 5-2 (Obligation of Customer Verification by Financial Companies, etc.) ① Financial companies, etc. shall take reasonable precautions to prevent money laundering and public funding procurement activities using financial transactions by taking the measures according to the following divisions. In this case, financial companies, etc. shall prepare and operate business guidelines for this purpose. 3. In case the customer is a virtual asset business: To confirm the following items a. Items of subparagraphs (1) or (2). b. Matters regarding compliance with the reporting and amended reporting obligations pursuant to Article 17, Paragraphs 1 and 2. c. Matters regarding acceptance of the notification pursuant to Article 17, Paragraph 3. d. Matters regarding discretionary cancellation of notification or amended notification pursuant to Article 17, Paragraph 2. e. Matters regarding compliance with the following 1) or 2). 1) Management of deposits (meaning monetary deposits received from customers of the virtual asset business in connection with virtual asset transactions) separately from proprietary assets (meaning the business's own assets). 2) Acquisition of information security management system certification pursuant to Article 11, Paragraph 1 or Article 11, Paragraph 1-2 of the “Act on Promotion of Information Communication Networks and Protection of Information” The Specific Financial Transaction Information Act obligates financial companies, etc. to confirm certain items when they have virtual asset businesses as customers. Therefore, Law firm Veat reviewed whether the Client was a financial company, etc., whether the Target Company was a virtual asset business, whether the Client’s investment in the Target Company triggered the customer verification obligations under the Specific Financial Transaction Information Act, and proposed measures for the Client to avoid violating the Act. 3. Matters to Consider When Investing in Overseas Entities 「Foreign Exchange Transactions Act」 ① The definitions of the terms used in this Act are as follows. 19. “Capital Transaction” means any transaction or act falling under any of the following: d. Acquisition of real estate in a foreign country or rights related thereto by a resident, or acquisition of real estate in the Republic of Korea or rights related thereto by a non-resident. Article 18 (Reporting, etc. of Capital Transactions) ① A person intending to engage in a capital transaction shall report to the Minister of Strategy and Finance in accordance with the provisions of the Enforcement Decree. However, capital transactions for which foreign exchange stabilization and smooth external transactions are ensured may be reported or not reported afterwards pursuant to the Enforcement Decree. It is necessary to analyze individual and specific situations to determine whether a certain act is subject to reporting under the Foreign Exchange Transactions Act. Law firm Veat thoroughly reviewed whether reporting was required under the Foreign Exchange Transactions Act and relevant regulations, drawing on expertise and know-how accumulated through resolving similar cases, and reviewed whether the Client’s investment was subject to reporting under the Foreign Exchange Transactions Act. Invest with confidence, together with Law firm Veat This case highlights the importance of thoroughly analyzing the domestic and foreign regulatory environment when a new technology business finance company invests in an entity performing virtual asset businesses overseas and of blocking legal risks before entering into investment agreements. Law firm Veat provides customized legal advice to various companies and investors in the virtual asset, fintech, blockchain, and financial regulation fields. If you experience legal issues while performing virtual asset-related businesses or entering into investment agreements, please contact Law firm Veat. Law firm Veat will be able to provide you with legal advice optimized for your specific circumstances. This case study can also be found on the Law firm Veat blog. - Is there a problem with domestic regulations for overseas virtual asset investments? Thank you. Law firm Veat
[Law firm Veat TIP] Why was the ‘Soribada’ service discontinued?
Law firm Veat’s TIP(Technology Intellectual Property) team has contributed a detailed explanation of replication rights for digital content to Platum, a specialized media platform for startups. The importance of copyright protection is increasing as the way content is used changes with the development of digital technologies such as P2P programs, streaming services, and cloud storage. This column details the concept and scope of replication rights, and whether replication occurs with streaming methods. [This link] allows you to view this column. The column published by Law firm Veat’s TIP team provided useful information to companies and creators who create or provide digital content such as music, video, and software. Copyright issues related to digital content are becoming increasingly refined and sophisticated with the advancement of technology. With the emergence of new technologies such as file storage, streaming, cloud storage, and NFT, existing copyright concepts have also evolved, and it is important to clearly understand how creators can protect their works through legal professionals. Law firm Veat’s TIP team provides systematic legal advice on legal issues related to copyright protection, such as replication rights and transmission rights for digital content. We support contract review, dispute response, and preventive legal measures to ensure that companies and creators do not suffer disadvantage due to copyright issues, and focus on strengthening legal protection so that creations can be properly protected.
Law firm Veat, Partner Attorney Baek Seung-cheol, Appointed as Specialist for the 4th Term Smart City Industry and Regulatory Exception.
March 7, 2025, at the 4th Smart City Industry and Regulatory Special Exception Committee Inauguration Ceremony, hosted by the Ministry of Land, Infrastructure and Transport, Law firm Veat’s Baek Seung-cheol Partner Attorney (hereinafter referred to as “Attorney Baek Seung-cheol”) was appointed as a committee member. The inauguration ceremony was attended by officials from the Ministry of Land, Infrastructure and Transport and smart city officials, and experts leading the industry and regulatory innovation of smart cities, including Law firm Veat’s Baek Seung-cheol Partner Attorney, were appointed as members of the 4th Smart City Industry and Regulatory Special Exception Committee. Attorney Baek Seung-cheol has extensive legal consultation experience in various fields such as IT, software, personal information and data utilization, smart infrastructure, and smart city legislation, and in particular, he has expertise in smart city regulatory sandbox and IT/new industry policy consultation. The Smart City Industry Regulatory Special Exception Committee is an organization established to improve regulations hindering the creation and development of smart cities and industries, support the smooth introduction of new technologies and innovative services, review the eligibility for regulatory exceptions, and promote the sustainable development of smart cities. The committee performs roles such as smart city-related legislation research, regulatory exception review, and policy consultation, and is carrying out various activities to create a smart city industry ecosystem. Attorney Baek Seung-cheol’s appointment is expected to further solidify Law firm Veat’s expertise and credibility in the public policy sector. During his three-year term, Partner Attorney Baek Seung-cheol is scheduled to actively participate in various policy and legal discussions for the development of the smart city industry and regulatory improvement and lead practical changes. Thank you. Law firm Veat
[IT Litigation] E-commerce Law Revised! ‘Dark Pattern’ Regulations Key Summary
As of February 14, 2025, the 「Act on the Protection of Consumers in Electronic Commerce, etc.」(hereinafter referred to as the “Revised Electronic Commerce Act”) has strengthened regulations on Dark Patterns to promote consumer protection. For businesses or telecommunications salespersons engaged in electronic commerce, optimizing the consumer experience is an important competitive factor, but actions that induce consumer mistakes or carelessness to lead to unnecessary spending may be subject to legal regulation. A Dark Pattern refers to a design or interface technique that induces consumers to make unintended decisions. For example, hiding automatic payment renewals or failing to clearly display the total payment amount, or deliberately making the cancellation process complicated, would be considered such practices. With the revision of the Act, electronic commerce companies and telecommunications salespersons need to check their existing operating methods and comply with the law. In this post, we will examine 6 types of Dark Patterns regulated by the Revised Electronic Commerce Act, answer frequently asked questions related to Dark Pattern regulations, outline penalties for violations, and discuss practical corporate response measures. 6 Types of Dark Patterns Regulated by the Revised Electronic Commerce Act 1. Hidden Renewal (Prohibition of Automatic Payment Induction) Hidden Renewal refers to the practice of automatically renewing a recurring payment product without separate consent, even if the price is increased or a previously free service is converted to a paid service. The Revised Electronic Commerce Act prohibits this practice and mandates prior consent and notification to consumers. 2. Prohibition of Sequential Price Disclosure Sequential price disclosure refers to the practice of displaying only a portion of the total price on the initial screen to entice consumers, then sequentially disclosing additional prices during the consumer’s product purchase process, and charging the consumer the final price including the additional price. The Revised Electronic Commerce Act prohibits this practice to ensure that consumers can clearly understand the total cost before purchasing. 3. Prohibition of Pre-Selection of Specific Options The Revised Electronic Commerce Act prohibits providing consumers with specific products with additional options pre-selected. This prevents unwanted additional payments and allows consumers to decide whether to select additional options. 4. Prohibition of Misleading Hierarchical Structure A misleading hierarchical structure refers to the practice of manipulating the size, color, or arrangement of selection items to mislead consumers into believing that a specific option is advantageous. The Revised Electronic Commerce Act prohibits this practice to allow consumers to make objective and fair selections. 5. Prohibition of Interference with Cancellation/Withdrawal The Revised Electronic Commerce Act prohibits practices that force or restrict consumers who wish to cancel a subscription service or withdraw membership by imposing complicated procedures or providing limited methods. 6. Prohibition of Repetitive Interference This refers to practices that repeatedly request consumers to receive advertising information, agree to personal information use/provision, etc., inducing them to agree without due consideration. For example, practices that continuously request consumers to reverse their choices through pop-up windows are prohibited. Frequently Asked Questions (FAQ) Related to Dark Pattern Regulations 1. Regarding Hidden Renewals Q. When must consumer consent be obtained and by what date? A. Consumers must provide clear consent within 30 days of the payment date when the price is increased or a conversion to a paid service occurs. Q. Is additional consent required if the change was already notified at the time of the initial contract? A. Even if the change was previously notified, a process must be in place that allows consumers to easily reconfirm and cancel the automatic renewal. 2. Regarding Sequential Price Disclosure Q. What is the first screen where price information is displayed? A. This refers to the first screen on a cyber mall that induces consumers to purchase by showing them the product and price. For example, this may include search result screens or category screens. 3. Regarding Pre-Selection of Specific Options Q. Is pre-selecting an option considered a Dark Pattern? A. Yes, pre-selecting an option can be considered a Dark Pattern. It's important to allow consumers to make informed decisions without unwanted additions. 4. Regarding Interference with Cancellation/Withdrawal Q. What are the consequences of hindering cancellation or withdrawal? A. Regulations prohibit companies from hindering consumers who wish to cancel a subscription or withdraw membership. Transparency and ease of process are essential. 5. Regarding Repetitive Interference Q. How does repetitive solicitation affect consumer experience? A. Repeatedly asking consumers to agree to terms without proper consideration is considered a Dark Pattern. Companies need to ensure a respectful and less intrusive communication strategy. Penalties for Violations Businesses using online Dark Patterns in violation of the Electronic Commerce Act may receive corrective actions from the Fair Trade Commission (Article 1, Paragraph 1 of the Act). If a business fails to comply with the corrective action order or if corrective action alone is not sufficient to prevent consumer damage, stronger sanctions may be imposed. These may include business suspension orders and fines for businesses that violate Dark Pattern-related regulations. The amount of the fine may vary depending on the severity of the violation and the extent of the damage. Corporate Response Measures With the strengthening of Dark Pattern regulations through the revision of the Electronic Commerce Act, electronic commerce companies and telecommunications salespersons must establish consumer-friendly operating practices. It is particularly important to review elements such as automatic payment renewals, price information provision, and withdrawal procedures, and to improve systems to comply with the new regulations. >Improve Website and App UX/UI: Thoroughly review elements that may be considered Dark Patterns, such as automatic payments, price information, option selection, and withdrawal procedures, and redesign them to allow consumers to make decisions based on clear information. >Revise Terms and Conditions and Internal Policies: Terms and conditions related to recurring payments, cancellation/withdrawal, and price display methods must be revised. It is important to verify that policies such as automatic conversion from free trials to paid subscriptions meet legal requirements. It may be necessary to have a legal professional review the need for specific adjustments. Revise terms and conditions for recurring payments, price information, and withdrawal procedures, and establish internal policies that meet legal requirements. >Develop a Response Strategy for the Fair Trade Commission and Consumer Protection Agencies: If there is a risk of violation of the law, companies should proactively develop a response strategy in consultation with legal professionals with experience in Fair Trade Commission investigations and establish a plan for smooth cooperation with consumer protection agencies. >Utilize Legal Review and Advisory Services: You should review how the revised Electronic Commerce Act affects your operating practices and verify whether specific practices are subject to regulation. Regularly using legal advisory services to check for compliance with Dark Pattern regulations and continuously identify areas for improvement from a consumer protection perspective is also an effective method. Lawmu Law Office provides expert legal advice to assist with compliance with the revised Electronic Commerce Act, supporting companies in preventing violations and providing customized solutions. Electronic commerce companies and telecommunications salespersons must be familiar with this revision and develop appropriate response measures. Please contact Lawmu Law Office for legal reviews or response strategies.
Law firm Veat, Songdo-young, Representative Lawyer, Appointed as the 11th Electronic Document and Electronic Transaction Dispute Mediation Committee Member
On March 6, 2025, at the 3rd floor Grand Hall of the KISA Seoul Headquarters, the induction ceremony for the 11th Electronic Document & Electronic Transaction Dispute Mediation Committee was held, where Song Do-young, Representative Attorney of Law firm Veat (hereinafter referred to as "Attorney Song Do-young"), was appointed as a member. The induction ceremony was attended by officials from the Ministry of Science and ICT and the Korea Internet & Security Agency (KISA), and experts in electronic documents and electronic transactions, including Attorney Song Do-young of Law firm Veat, were appointed as members of the 11th Electronic Document & Electronic Transaction Dispute Mediation Committee. Attorney Song Do-young, as the Representative Attorney of Law firm Veat, which provides professional legal services in various fields such as IT, startups, e-commerce, personal information, intellectual property, blockchain, and regulatory sandbox, has extensive legal advisory experience related to disputes arising from online advertising and platform-based services. The Electronic Document & Electronic Transaction Dispute Mediation Committee is an organization established to mediate disputes arising from electronic documents and electronic transactions, establish fair trading practices, create a healthy cyberspace, promote the use of electronic documents and electronic transactions, and protect the rights of businesses and users. The committee is comprised of experts in the fields related to electronic documents and electronic transactions, and performs various functions such as promoting education and public relations for dispute prevention, providing consultation and mediation services for dispute resolution. Attorney Song Do-young's appointment is expected to further strengthen the expertise and credibility of Law firm Veat. During his three-year term, Attorney Song Do-young is scheduled to contribute to the creation of a healthy electronic transaction environment by quickly and fairly mediating various disputes arising in the field of electronic documents and electronic transactions. Thank you. Law firm Veat
"Legal Issues Companies Must Verify When Terminating Exclusive Model Contracts"
Law firm Veat received a request from Entertainment Company A (hereinafter referred to as "the client") to provide legal advice regarding the termination of an exclusive model contract. The client had entered into a joint brand contract with a specific brand, and subsequently entered into a separate exclusive model contract with that brand. However, due to business needs, the client hoped to mutually terminate the joint brand contract, and it was necessary to review matters such as the usage period of deliverables and model fees arising from the termination of the exclusive model contract. In the entertainment industry, exclusive model contracts with brands are an important element of a company's marketing strategy. However, circumstances may arise where an exclusive model contract must be terminated, and in such situations, a legal review to prevent unnecessary issues is essential. Mutual termination of a joint brand contract Unlike a simple exclusive model contract, a joint brand contract includes additional legal issues such as profit sharing and brand usage rights. When reviewing mutual termination, it is possible to terminate the contract if certain conditions are met by analyzing the termination clause in the contract. Also, determining the appropriate time for contract termination can prevent unnecessary legal disputes. Especially, when a joint brand contract exists, the termination of an exclusive model contract may be affected by whether the joint brand contract is terminated, so it is necessary to comprehensively review both contracts and proceed with the termination process. Generally, proceeding with the termination process through amicable consultation with the model is the most desirable approach, and if mutual termination is difficult, the contract can be terminated based on the termination clause specified in the contract. Usage period of deliverables and model fee payment When an exclusive model contract is terminated, the usage period of previously produced advertisements or promotional materials can be a key issue. It is necessary to confirm whether the contract specifies when the deliverables can be used, which is also related to the model's right of publicity and publicity rights. Therefore, it is necessary to confirm whether the usage of deliverables is possible after the termination of the contract and prepare corresponding legal countermeasures. Also, if the exclusive model contract includes a minimum guarantee, there is an obligation to pay a certain level of model fee even after the contract is terminated. It is important to prepare specific payment plans to ensure that the company complies with its legal obligations and terminates the contract smoothly by reviewing the model fee payment conditions specified in the contract. * What is a Minimum Guarantee (Minimum Guarantee)? A minimum guarantee means the minimum compensation guaranteed to a model during the contract period. In an exclusive model contract, a company enters into a contract to exclusively use the model’s image and publicity rights for a certain period, and this is the minimum compensation for that. From the company's perspective, this is a marketing expense that is fixed regardless of the number of advertising shoots, and the contract may include additional incentives based on the number of advertising exposures or product sales in addition to the minimum guarantee. Law firm Veat thoroughly reviewed the termination process for exclusive model contracts with entertainment companies through this case study and presented ways to minimize legal risks. Moving forward, Law firm Veat will continue to provide expert legal advice on various entertainment legal issues to help clients effectively resolve legal problems. If you require legal advice related to entertainment operations, such as termination of exclusive brand contracts, model fee payment and settlement, please feel free to contact Law firm Veat. This case study can also be viewed on the Law firm Veat blog. - Legal issues to be confirmed by a company when terminating an exclusive model contract Thank you. Law firm Veat
Law firm Veat, Ju-hyeong Professional Fellow, "ESG Adoption Essential for the Agricultural Sector"
As the importance of ESG (Environmental, Social, Governance) has expanded in the recent global market, arguments have been raised that the domestic agricultural sector also needs to prepare for it. Accordingly, (SA) Korea Food and Agricultural Law System Research Institute held its 6th regular general meeting and conducted discussions on ‘Agriculture and ESG’, and Ju-hyeong Lee, Senior Partner (Head of Food Regulatory Consulting Team) of Law firm Veat, participated as the presenter, providing important insights.
Point 4: Contract drafting and review for collaborations with creators and influencers
Law firm Veat received a request from clothing, fashion, accessories, and beauty SME A (hereinafter referred to as "the client") and proceeded with influencer collaboration product contract review. Recently, collaboration with creators and influencers is occurring in the consumer goods industry such as clothing, fashion, accessories, and beauty, and the influence of creators and influencers is expanding beyond marketing to product planning and sales strategy. Content created by creators and influencers acts not only as a marketing tool but also as a factor that determines brand identity and product competitiveness. Clear contracts are essential for stable operation of such collaborations.
Content IP Asset Acquisition, Essential Points to Verify When Drafting Contracts
Law firm Veat drafted an asset purchase agreement at the request of a company in the content book field (hereinafter referred to as “client”), and thoroughly reviewed the legal risks that could arise from it. Key Contents of the Asset Purchase Agreement
[Personal Information Protection Act] Precautions when collecting personal information of minors, fine if you don’t know?
Law firm Veat provided legal advice to a healthcare startup (hereinafter referred to as "client") regarding whether the collection and use of personal information was legally permissible when providing online services to minors, and if so, what points should be considered. Why is Minor Personal Information Protection Special? The 「Personal Information Protection Act」 and related regulations in Korea regulate the collection, use, and provision of minor personal information more strictly than for adults. Therefore, especially in online services frequently used by minors (e.g., social media, games, streaming platforms, etc.), you need to operate your business, paying attention to these differences. Essential Procedures for Collecting and Using Minor Personal Information 「Personal Information Protection Act」 Article 15 (Collection and Use of Personal Information) ① A personal information processor may collect personal information and use it within the scope of the purpose of collection, in cases falling under any of the following: 1. When consent has been received from the information subject. 2. ~ 7. (Omitted) Article 22-2 (Protection of Personal Information of Children) ① When a personal information processor must obtain consent in accordance with this Act to process the personal information of a child under the age of 14, he or she must obtain the consent of the child's legal representative and verify whether the legal representative has consented. ② Notwithstanding the provisions of paragraph 1, the minimum information necessary to obtain the consent of a legal representative as stipulated by Presidential Decree is information that may be collected from the child without the consent of the legal representative. ③ A personal information processor shall use an easy-to-understand format and clear and easy-to-understand language when notifying a child under the age of 14 about matters related to personal information processing. ④ Matters necessary for consent and verification methods, etc. other than those stipulated in paragraphs 1 to 3 shall be determined by Presidential Decree. The Personal Information Protection Act stipulates that, except for special circumstances such as when there are special provisions in the law or when complying with legal obligations, consent from the information subject themselves must be obtained for the collection and use of personal information. However, for children under the age of 14, the consent of the legal representative of the child, who is the information subject, must be obtained. Furthermore, a personal information processor is obligated to use an easy-to-understand format and clear and easy-to-understand language when notifying a child under the age of 14 about matters related to personal information processing. If a personal information processor fails to obtain the consent of a legal representative or fails to verify whether a legal representative has consented when collecting personal information of a child under the age of 14, he or she may be subject to imprisonment for up to 5 years or a fine of up to 50 million won (Article 71(3) of the Personal Information Protection Act, Article 64-2(1)(2) of the same Act), and a surcharge may be imposed within a limit not exceeding 100% of the total sales revenue, so it is necessary to pay special attention when providing services to minors. Protecting Children’s Personal Information with a Personal Information Legal Expert! As explained above, failure to obtain and verify the consent of a legal representative when collecting information from children may result in criminal punishment and property disadvantages, so if your service allows minors to register, you must carefully review these matters. However, since it is difficult for general public to accurately understand what content is required by the Personal Information Protection Act and how to comply, we recommend that you obtain legal advice from a legal expert with expertise in the Personal Information Protection Act. Law firm Veat provided guidance to the client regarding additional procedures for the processing of minor personal information as stipulated in the Personal Information Protection Act, and provided service-specific legal advice on matters to be noted to avoid violating relevant laws and regulations during the service provision process. Legal Advice from Law firm Veat: Customized Legal Support for Safe Business Operations Law firm Veat supports not only the protection of personal information for services targeting minors, but also provides legal review and practical measures for overall personal information protection, helping companies to operate services in a state of minimizing legal risks. Through this advice, the client was able to prevent legal issues in the collection and use of personal information and establish a legal basis for stable service operation. If you need legal advice regarding online services targeting minors, we recommend that you seek help from Law firm Veat at any time. This business case study can also be viewed on the Law firm Veat blog. -[Personal Information Protection Act] Precautions When Collecting Minor Personal Information, Fine? Thank you. Law firm Veat