Case Studies
Web3-based sports training platform virtual asset business model legality review case
Recently, Law firm Veat received a request from a startup operating a Web3 sports training platform using Web3 technology, and comprehensively reviewed whether the virtual asset-related business model of the platform is legally compliant. The platform provides services where users can exchange points earned during service use for virtual assets issued by the company. In addition, it implements a buy-back policy to increase the value of these virtual assets and is considering partnerships with other companies to manage virtual asset liquidity and stabilize prices. Law firm Veat reviewed whether this business model complies with domestic virtual asset-related regulations and presented ways to operate it legally. Review of Applicable Laws and Regulations Compliance Measures Reporting Obligations of Virtual Asset Business Operators According to the Act on Virtual Asset User Protection (hereinafter referred to as the “Virtual Asset User Protection Act”), a virtual asset business operator means an entity engaging in the act of selling, buying, exchanging, storing, or managing virtual assets as a business (Article 2(2)), and according to the Act on Reporting and Use of Specific Financial Transaction Information (hereinafter referred to as the “Specific Financial Transaction Act”), if it is deemed a virtual asset business operator, it must report its registration as a virtual asset business operator to the Financial Intelligence Unit (Article 17(1)). If a company engages in virtual asset transactions as a business without registering as a virtual asset business operator with the Financial Intelligence Unit, it may be sentenced to imprisonment for up to five years or a fine of up to 50 million won (Specific Financial Transaction Act Article 17(1)). Therefore, companies using virtual assets for business need to accurately determine whether they qualify as virtual asset business operators. However, whether an entity qualifies as a virtual asset business operator may vary depending on the specific circumstances of the company and its business, so it is necessary to seek the assistance of legal professionals with extensive experience in reviewing virtual asset and blockchain-related legal precedents. Prohibition of Unfair Trading Practices by Virtual Asset Business Operators The Virtual Asset User Protection Act generally prohibits virtual asset business operators from buying and selling virtual assets issued by themselves or their related parties and other transactions (Virtual Asset User Protection Act Article 10(5)). If one violates this trading restriction and buys and sells virtual assets issued by themselves or their related parties, or engages in other transactions, they may be sentenced to imprisonment with or without hard labor for up to 10 years or a fine equivalent to three to five times the profit obtained from or loss avoided by the violation (Virtual Asset User Protection Act Article 19(2)), so it is necessary to pay particular attention to not constituting a prohibited unfair trading practice in accordance with the Virtual Asset User Protection Act. Customized Consulting from Law firm Veat Based on Customer's Specific Situation In this review, the Specific Financial Transaction Act and the Virtual Asset User Protection Act were primarily addressed. These laws stipulate reporting obligations for virtual asset business operators, prohibition of unfair trading, and protection of user assets. Law firm Veat conducted a thorough review and customized consulting based on an understanding of the customer's specific situation and expertise in this field, so that the customer can comply with related regulations. In particular, the main contents of the Virtual Asset User Protection Act, which came into effect in July 2024, were reflected to re-review the details of the business model so that the platform's service structure can comply with the law. Law firm Veat's Differentiated Expertise Law firm Veat has provided legal advice to numerous startups based on its outstanding expertise in the blockchain and virtual asset fields. In particular, Managing Partner Song Do-young has participated in the drafting process of the Virtual Asset Convergence Industry Promotion Act and has deep expertise in the field of virtual assets, and is strong in diagnosing legal risks in advance and providing solutions in the environment where virtual asset-related laws are newly changing. If you need legal advice on blockchain and virtual assets, please consider receiving professional consulting from Law firm Veat. Thank you. Law firm Veat
Prepaid electronic payment service provider, advised by Law firm Veat, prepares for revised laws.
Law firm Veat received a request from Company A (hereinafter referred to as the "client"), which provides a mobile gift card purchase service using points, to review the legal implications of whether the client's service qualifies as a prepaid electronic payment means. The client provides a service that allows users to purchase mobile gift cards using points accumulated within the service. Law firm Veat's e-commerce team reviewed whether the point system qualifies as a prepaid electronic payment means and whether it would be subject to legal regulations if used to purchase goods or services from a third party other than the issuer, taking into account the revised 「Electronic Financial Transactions Act」, which will be implemented on September 15, 2024. What is the revised 「Electronic Financial Transactions Act」 scheduled to be implemented on September 15, 2024? The revised Electronic Financial Transactions Act, scheduled to be implemented on September 15, 2024, significantly strengthens the legal scope and regulations related to prepaid electronic payment means and includes important changes that companies providing various electronic financial services must be aware of. The revised Electronic Financial Transactions Act broadens the scope of prepaid electronic payment means, which means that some service providers who were not previously registered as prepaid service providers may now be included in the new prepaid service provider registration target. Particularly, as the legal obligations related to the issuance and operation of prepaid electronic payment means have been strengthened, companies concerned must complete registration by the expiration date of their prepaid service provider registration. Furthermore, this revised law has significantly reduced the exemption reasons for prepaid service provider registration. The conditions for exemption from prepaid service provider registration have been changed to be more stringent, and as a result, many companies may be newly included in the registration target. This revised Electronic Financial Transactions Act strengthens the obligation for companies providing prepaid recharge services to register as prepaid service providers and requires them to comply with legal requirements. Accordingly, companies operating points and similar services should expedite the preparation of prepaid service provider registration procedures in accordance with the revised law, and should carefully review the eligibility for registration and legal requirements with the assistance of a legal expert familiar with e-commerce related laws. Law firm Veat is providing professional legal advice to help companies minimize legal risks and continue stable business operations in line with these legal changes. We are proactively understanding and analyzing the revised law and helping companies adequately respond to the new regulatory environment. If you operate a prepaid electronic payment business and require legal advice, please contact Law firm Veat. Thank you. Law firm Veat "
[Law firm Veat TIP] What kind of building is a architectural work protected by copyright law?
Law firm Veat TIP(Technology Intellectual Property) team has thoroughly covered architectural works protected by copyright law through Platum, a magazine specializing in startups. Buildings go beyond simple spaces and are works of art protected by copyright law. Buildings with creative designs and unique designs can be recognized as architectural works. This column explains how buildings are protected under copyright law and the necessity of copyright protection. [해당링크] You can check this column through. This column published by Law firm Veat TIP team provided useful information to architects who have designed unique buildings or are curious whether their architectural designs are eligible for copyright protection. Copyright issues related to architectural works are very diverse and complex, so we recommend that creators seek the help of legal professionals to formulate legal strategies to protect copyright law. Law firm Veat TIP team is committed to protecting the rights of creators through legal advice and copyright protection strategies related to architectural works, and provides professional solutions to copyright issues related to architecture. If you need legal advice regarding architectural works, please contact Law firm Veat TIP team. Thank you. Law firm Veat
Subsidiary's electronic financial business registration requirements legal review
Law firm Veat received a request from a subsidiary A company (hereinafter referred to as "the client company") that is a group company’s affiliate and subsidiary, and proceeded with a review of whether to register as an electronic financial business. The Fair Trade Act restricts a group company from owning shares of a subsidiary engaged in financial and insurance businesses. Therefore, if a subsidiary engages in an electronic financial business, it is necessary to determine whether this constitutes a financial or insurance business. Law firm Veat reviewed the client company's business content in various aspects, in accordance with relevant laws and precedents, including the Electronic Financial Transactions Act and the Fair Trade Act. Review of the subsidiary’s electronic financial business registration requirements An electronic financial business refers to an industry that utilizes information and communication technology to provide traditional financial services in digital form. An electronic financial business is regulated by the Electronic Financial Transactions Act and includes various forms of digital financial services such as internet banking, mobile payments, electronic money, and online asset management services. If the subsidiary engages in an electronic financial business in accordance with the Electronic Financial Transactions Act, the group company’s act of owning shares of the subsidiary may be deemed a prohibited act under the Fair Trade Act, and the group company’s subsidiary may find it difficult to engage in and register for the electronic financial business. However, if certain conditions are met, the subsidiary may not be deemed to have engaged in a prohibited act, and further details need to be confirmed. First, it is necessary to confirm whether an electronic financial business constitutes a financial or insurance business. Whether an electronic financial business constitutes a financial or insurance business is determined based on the standard industrial classification criteria. The standard industrial classification criteria, in accordance with the Statistics Act, classify the types of industry and determine the legal status of each sector based on this. According to the standard industrial classification criteria, financial and insurance businesses include traditional financial services and insurance businesses, while electronic financial businesses include the provision of digitally-based financial services. Also, according to the Electronic Financial Transactions Act, a company engaged in an electronic financial business must have the legal requirements and obtain approval from the Financial Supervisory Service. Law firm Veat's e-commerce team swiftly and accurately resolves complex legal issues related to e-commerce faced by startups and companies, and will continue to provide comprehensive legal advice to support client companies in stably expanding their businesses. If you require legal advice regarding electronic financial businesses, financial and insurance businesses, the Electronic Financial Transactions Act, or the Fair Trade Act, please contact Law firm Veat. Thank you. Law firm Veat
Law firm Veat, leads RWA (Asset-linked assets) discussion at KBW2024.
Leading law firm Law firm Veat, which holds a unique position in the legal field of blockchain and virtual assets, participated in Korea Blockchain Week 2024, a global blockchain event held at the Walkerhill Hotel in Seoul from September 1 to 7, 2024. Korea Blockchain Week (hereinafter "KBW") has been held annually in Seoul since 2018 as a global blockchain and Web3 festival, and has established itself as an important meeting place for blockchain and Web3 leaders from around the world. This event was co-hosted by FACTBLOCK and Hashed as an integrated platform to promote the exchange of information on blockchain and connect various communities, with substantial participation from blockchain experts, investors, cryptocurrency and Web3 professionals, resulting in meaningful interactions. KBW plans various prestigious events each year, including the flagship conference 'IMPACT', and the 'RWA (Real World Asset) Global Summit' held in the Light Lounge during this year's event particularly garnered the attention of many participants. Song Usuk, a Senior Foreign Attorney of Law firm Veat, who served as legal counsel for the world's leading virtual asset exchange, Binance (BINANCE), participated as a Moderator at the RWA Global Summit, which dealt with the legal aspects of RWA. Song Usuk, an attorney of Law firm Veat and a blockchain business expert, led a in-depth discussion on regulatory issues and the legal framework related to RWA, leading the discussion with the perspective of a legal expert in the related industry. RWA is an important concept that connects real-world assets with blockchain technology to create new business opportunities, and its importance is rapidly increasing in the global blockchain industry. In particular, as discussions on the legalization of security tokens are actively progressing, legal review of real-world assets has become an important element for global blockchain operators, and collaboration for this purpose is continuously discussed and accelerated. Law firm Veat, in line with these changes, visited Veat's clients during the KBW2024 event and established close networks with major blockchain project stakeholders and experts, with the intention of reflecting the latest trends in the blockchain industry and focusing on providing clients with more specialized legal advice. Law firm Veat is providing clients with the optimal legal solutions to adopt innovative business models. In particular, it provides optimized solutions for issues such as legal status review as a virtual asset operator, token white paper (security) review and legal opinion drafting for virtual asset exchange listing, overseas corporate contract structure and legal due diligence, helping clients comply with regulatory and legal requirements and successfully pursue their businesses. Law firm Veat has established itself as the best partner for resolving legal issues in uncertain blockchain businesses, based on its abundant experience in the legal advisory field of blockchain and virtual assets and its global network, and provides specialized virtual asset and blockchain legal advice from legal experts who are active as experts on the Korea Bar Association IT Blockchain Special Committee, former senior legal counsel for Binance (Binance), the world's largest virtual asset exchange, and provides practical help for a variety of legal issues faced by clients in the complex and uncertain regulatory environment of the blockchain industry. Following a successful activity at KBW2024, Law firm Veat is preparing for a greater leap in the blockchain and virtual asset market. If you need legal advice on RWA, cryptocurrency, or blockchain business, please contact Law firm Veat. Thank you. Law firm Veat
Review of foreign exchange transaction law reporting upon acquisition of shares in a domestic corporation by a foreigner. Law firm Veat
Law firm Veat performed an in-depth legal review regarding whether a foreign national residing in the Republic of Korea triggers a reporting obligation under the “Foreign Exchange Transactions Act” when acquiring shares of a domestic corporation. The Foreign Exchange Transactions Act considers foreign nationals engaged in business activities within Korea or residing in Korea for a certain period or longer as residents, and serves as an important legal standard for share acquisition. Therefore, when a foreign national residing in Korea intends to acquire shares, it is important to thoroughly review the resident requirements under the Foreign Exchange Transactions Act and receive appropriate legal advice to ensure compliance with the law. Law firm Veat reviewed whether the foreign national in question qualifies as a resident under the Foreign Exchange Transactions Act, and then confirmed whether a report is required if that foreign national acquires shares of a domestic corporation. Required “Foreign Exchange Transactions Act” reporting for foreign exchange transactions When a foreign national acquires shares of a domestic corporation, and it falls under the reporting scope according to the Foreign Exchange Transactions Act, they must strictly comply with the relevant laws and regulations and proceed with the proper reporting procedures. If the transaction qualifies as a capital transaction under the Foreign Exchange Transactions Act, it must be reported to the Minister of Strategy and Finance, and unless a non-resident acquires securities from a resident, it must be reported to the Governor of the Bank of Korea. According to the Foreign Exchange Transactions Act, individuals with a domicile or residence within the Republic of Korea, or corporations with a principal office in Korea, are deemed residents. In particular, foreign nationals engaged in business activities in Korea or residing in Korea for a certain period or longer are also recognized as residents under the law. Therefore, to confirm whether a foreign exchange reporting obligation arises when a foreign national acquires shares of a domestic corporation, it is necessary to receive advice from a legal expert with extensive experience in foreign exchange transactions to confirm whether it falls under the reporting scope, procedures, and required documents. Foreign exchange reporting can be applied to various transactions, including foreign currency remittances, foreign currency loans and borrowings, acquisition and transfer of securities, and international trade transactions. If foreign currency is paid or received without complying with the reporting procedures under the Foreign Exchange Transactions Act, it may constitute a violation of the Foreign Exchange Transactions Act. Such situations may give rise to legal problems, so it is important to consult with an expert with extensive experience in foreign exchange reporting and comply with proper procedures. The Foreign Exchange Transactions Act has complex and detailed provisions, which can cause many companies to struggle to comply. Therefore, we recommend obtaining accurate legal review and professional advice from a foreign exchange lawyer to determine whether it falls under the reporting scope and which reports to proceed with. Law firm Veat’s Foreign Exchange Reporting Center has a clear understanding of various foreign exchange transaction types, such as securities acquisition reporting by residents or non-residents, and foreign investment reporting, and provides a one-stop service covering all processes from identifying reporting scope to preparing the reporting form and submitting it to relevant agencies.
Large-scale distribution trade rules, Law firm Veat’s risk prevention
Law firm Veat received a request from a large-scale distributor A (hereinafter referred to as "the client") and conducted an in-depth legal review regarding the obligation to pay and the validity of the related agreement. The obligation of a large-scale distributor to pay to a supplier is stipulated in the "Act on Fair Trade in Large-Scale Distribution" (hereinafter referred to as "the Large-Scale Distribution Act"). In particular, Article 7, Paragraph 1, Sub-item 3 of the Large-Scale Distribution Act stipulates that if a large-scale distributor sells goods entrusted by a supplier, they must pay the sales amount within 40 days from the end of the monthly sales closing date. However, there are cases where distributors negotiate different conditions with suppliers through contracts, deviating from this regulation. The corporate advisory team of Law firm Veat conducted a detailed legal review to determine whether such agreements are valid and free from legal issues. The corporate advisory team of Law firm Veat provided the client with detailed information on comprehensive conditions, including the validity of the agreement, requirements for consent, and burden of proof, based on case law regarding the validity of agreements related to the Large-Scale Distribution Act. Understanding the Large-Scale Distribution Act, items distributors should check This law, referred to as the "Act on Fair Trade in Large-Scale Distribution," was established to protect fair trading relationships between large-scale distributors and suppliers or store tenants. This law plays an important role in promoting fair competition in the distribution market and enabling large-scale distributors and suppliers to achieve mutual benefit. Article 7 of the Large-Scale Distribution Act clearly stipulates the deadline for paying the sales amount when a large-scale distributor receives goods from a supplier and sells them. Specifically, a large-scale distributor must pay the sales amount within 40 days from the end of the monthly sales closing date in the following cases. 1. When selling goods procured through special purchase transactions. 2. When receiving and managing the sales amount of a store tenant. 3. When selling goods entrusted by a supplier and receiving and managing the sales amount. The Large-Scale Distribution Act includes various regulations to prevent unfair practices by large-scale distributors, and violation of these regulations may result in sanctions from the Fair Trade Commission. Therefore, distributors of a certain size must comply with the law in all trading processes, including contract negotiation, payment, returns, and promotional cost sharing. If you are engaged in distribution business, it is very important to clearly understand the various complex regulations of the Large-Scale Distribution Act and follow the proper procedures at each transaction stage. Therefore, it is necessary to receive legal advice from a professional to prevent legal risks in advance and reduce the risk of sanctions. Law firm Veat analyzes regulations related to large-scale distribution in detail and provides the client with the optimal legal services that match their business situation. In particular, we provide systematic legal advice for various contract reviews and legal dispute prevention, helping clients reduce legal risks. If you need legal advice regarding large-scale distribution, please contact Law firm Veat. Thank you. Law firm Veat
"Are virtual asset wallet service providers, virtual asset payment shopping mall operators, or virtual asset businesses?"
Recently, the virtual asset market has grown rapidly, and various virtual asset-related business models have emerged. Client A requested legal advice from Law firm Veat regarding whether they qualify as a virtual asset business operator. If one is deemed a virtual asset business operator, they must report to the Financial Intelligence Unit (FIU) as a virtual asset business operator pursuant to the “Act on Reporting and Use of Specific Financial Transaction Information” (hereinafter “Specific Financial Transaction Act”) (Article 2, Paragraph 1), and failure to report as a virtual asset business operator and engaging in virtual asset transactions as a business can result in imprisonment for up to 5 years or a fine of up to 50 million won (Article 17, Paragraph 1), so it is necessary to clearly determine whether one qualifies as a virtual asset business operator. Law firm Veat provides tailored legal advice by rapidly and accurately analyzing the legal issues faced by clients, based on its extensive experience in the virtual asset and blockchain fields. Determination of whether a virtual asset wallet service provider qualifies as a virtual asset business operator A virtual asset business operator means one who engages in actions such as selling, buying, exchanging, storing, and managing virtual assets as a business (Virtual Asset User Protection Act, Article 2, Paragraph 2). Generally, a business providing a virtual asset wallet service (hereinafter “virtual asset wallet service provider”) has a high probability of performing the role of storing and managing virtual assets of users, and is often interpreted as a virtual asset business operator. However, whether it qualifies as a virtual asset business operator may depend on the specific manner of providing the wallet service. If a virtual asset wallet service provider only performs the role of a platform provider for the wallet service and does not actually store or manage virtual assets, that business may not qualify as a virtual asset business operator. However, a review of specific circumstances is necessary, and it is recommended that one verify this through legal advice from a legal professional with extensive experience. Determination of whether an operator of a virtual asset payment shopping mall qualifies as a virtual asset business operator Meanwhile, in the case of an operator of a shopping mall using virtual assets as a payment method, a legal review is necessary to determine whether the act of receiving payment in virtual assets can be interpreted as selling or brokering virtual assets. However, to accurately determine whether an operator of a virtual asset payment shopping mall qualifies as a virtual asset business operator, a review of specific circumstances, such as the shopping mall's product sales and fund settlement structure, and the legal nature of the virtual asset used as a payment method, is necessary. It is recommended that one obtain a review from a legal professional with extensive experience in the virtual asset and blockchain fields. Law firm Veat provides practical and specific advice to startups and IT companies facing legal issues, based on a deep understanding of virtual asset business and related legislation. In particular, Partner Attorney Ahn Il-woon actively provides legal advice and contributes to legal issues related to blockchain technology and virtual assets as a Certified IT Specialist Attorney of the Korea Bar Association and a member of the Korea Bar Association Blockchain Special Committee. Attorney Ahn provides in-depth insights into how blockchain technology is legally implemented and regulated, based on his outstanding expertise in the blockchain field, and provides important legal advice to numerous startups, blockchain platforms, and virtual asset exchanges. Also, Senior Foreign Attorney Song Woo-seok of Law firm Veat has experience as a Senior Legal Counsel at Binance, a virtual asset exchange, and currently serves as a Legal Advisor to the Korea Blockchain Business Cooperative. Based on his extensive experience in an international virtual asset exchange, Attorney Song provides in-depth advice on complex legal issues such as Anti-Money Laundering (AML) and cross-border M&A for numerous domestic and international blockchain projects and virtual asset transactions. If you require legal advice regarding virtual assets and related legislation or blockchain business, please contact Law firm Veat. Thank you. Law firm Veat
Law firm Veat launched 'Law Series', a customized legal service for startups and VCs.
Startup media Platum introduces Law firm Veat’s customized legal service ‘Law Series’ and it is receiving a lot of attention. Platum is a representative media that provides information related to startups, and the launch of Law Series is receiving attention in the startup ecosystem. Law Series provides specialized services for each growth stage of a startup, diagnoses legal risk factors that innovative startups overlook, and lawyers directly consult with startup executives to provide practical solutions. In addition, VCs can periodically provide a legal risk management report of the portfolio company to LPs (limited partners), enabling the establishment of a differentiated compliance system. Veat helps startups reduce legal risks through Law Series and helps prevent disputes between VCs and portfolio companies in advance. In an interview with Platum, Attorney Joonseok Byeon said, "My various litigation experiences as a judicial research fellow in court had a great influence on the design of Law Series." He frequently witnessed startups neglecting the legal foundation in the early stages and being unable to respond when disputes arise, and explained that based on this experience, Law Series is designed to provide legal advice and support needed at each stage. Attorney Jonghwan Jeon said about the purpose of Law Series, "It is a system designed to systematically manage legal risks and help growth," and added that it plays a role in supporting venture capital-backed companies to maintain legal stability. He emphasized that startups growing rapidly with innovative ideas can be seriously threatened with business survival if they lack a legal foundation, making it very important to prevent these problems in advance. Attorney Sohee Park emphasized that "investing in startups means more than just transferring capital," and stressed the importance of establishing a system that allows investors to anticipate and prepare for legal risks of companies. She added that Law Series plays a key role in preventing legal disputes between venture capital and startups, and strengthening partnerships. Law firm Veat has outstanding expertise in the IT and startup legal advisory field, and Law Series is established as a reliable partner for the successful growth and stable operation of startups and VCs. If you are curious about the full article, please refer to the link below, and for inquiries about Law Series, please contact Law firm Veat. ▶View Article: https://platum.kr/archives/234255 Thank you. From Law firm Veat
"Legal Review of Restrictions on Small and Medium-sized Enterprises’ Software Participation Due to Large Enterprise Investment under the 「Software Promotion Act」"
Law firm Veat received a request for legal advice from a small and medium-sized enterprise software business owner A (hereinafter referred to as "the client") regarding the permissibility of participating in a software business due to investment from a large corporation. The Law firm Veat startup advisory team thoroughly reviewed the scope of a large corporation software business owner under the "Software Promotion Act" and the status of a small and medium-sized enterprise according to the "Small and Medium-sized Enterprise Basic Act."