Case Studies
"Legal Review Related to the Introduction of Biometric Authentication in Online Investment-linked Finance Business"
Law firm Veat received a request from online investment-linked financial services provider A (hereinafter referred to as "the client") regarding a legal review of the introduction of biometric authentication for online investment-linked finance. The client intended to utilize a biometric authentication method in the process of confirming the investor's linked investment expression of intent. Accordingly, Law firm Veat reviewed whether the biometric authentication method is permissible under the Online Investment-Linked Financial Services Act and provided legal advice to ensure compliance with relevant laws and regulations. The Online Investment-Linked Financial Services Act specifies several methods for confirming an investor's expression of intent. According to this act, methods such as signature, certified signature, audio recording, email, mail, telephone automated response system, direct drafting by the investor, and verification methods of verification agencies are listed as methods for confirming investor intent. Law firm Veat reviewed whether the biometric authentication method could be recognized as one of these listed methods. Biometric authentication methods utilize the user's physical characteristics such as fingerprints, iris, and facial recognition, providing high security and convenience. We determined whether the biometric authentication method could be included in the verification methods of verification agencies specified in the Online Investment-Linked Financial Services Act and whether it complies with the act. In addition, various laws and regulations governing the online investment-linked financial services business, including the Financial Consumer Protection Act and the Special Financial Information Act, must be complied with. Law firm Veat comprehensively reviewed the Financial Consumer Protection Act and the Special Financial Information Act, to ensure that the linked investment process does not violate relevant laws and regulations. While introducing biometric authentication when an online investment-linked financial services provider confirms the investor's expression of intent can enhance investor convenience and strengthen security, it is essential to proceed with a legal review to determine whether it is an appropriate method of verifying investor intent under the Online Investment-Linked Financial Services Act. Law firm Veat has supported online investment-linked financial services providers to minimize legal risks and provide appropriate and efficient confirmation of investor intent through professional legal review. Law firm Veat's e-commerce team recognizes the importance of the Online Investment-Linked Financial Services Act, the Financial Consumer Protection Act, and the Special Financial Information Act, and is providing clients with detailed legal advice to ensure they meet the legal requirements stipulated in each law, such as principles and prohibitions. Law firm Veat contributes to minimizing legal risks by leveraging its extensive experience and expertise accumulated in innovative financial sectors such as online investment-linked finance, accurately understanding complex legal requirements, and providing customized advice tailored to the client's business model. If you have various legal questions arising from operating an online investment-linked financial services business, or if you need legal advice regarding the Online Investment-Linked Financial Services Act, the Financial Consumer Protection Act, or the Special Financial Information Act, please contact Law firm Veat. Thank you. Sincerely, Law firm Veat
[Law firm Veat_Plattum Column] Requirements for Copyright Protection
Law firm Veat TIP(Technology Intellectual Property) team has detailedly contributed to Platum, a startup specialized media, regarding copyright protection requirements for content. In order to become a work, it must satisfy the requirement of ‘creativity’. This column details what elements ‘creativity’ includes and the requirements to receive protection as copyright. Law firm Veat’s contribution to Platum explains copyright protection requirements that content managers, composers, cartoonists, and various other content creators should confirm, through examples, in an easy and clear way. You can confirm the full column via [this link]. Determining whether the requirement of creativity demanded by the copyright law is satisfied is very complex and not easy. It is very important to accurately understand the legal standards related to creativity and thoroughly grasp and apply relevant precedents, and Law firm Veat’s TIP(Technology Intellectual Property) team provides comprehensive legal review and consultation. Law firm Veat TIP team provides professional legal advice on requirements to obtain copyright protection, such as creativity, through deep understanding of copyright and a comprehensive approach. If you have legal issues regarding copyright protection, content copyright, please contact Law firm Veat. Thank you. Law firm Veat
Web3-based platform token securities legal review
Law firm Veat received a request from company A, an operator of a Web3-based platform (hereinafter “the Client”), to review the securities nature of tokens. The Client inquired about the requirements and procedures necessary to ensure that the process of listing tokens issued by the Client on a virtual asset exchange does not violate the “Act on Capital Markets and Financial Investment” (hereinafter “the Capital Market Act”). The Law firm Veat Virtual Asset Team comprehensively analyzed the Financial Supervisory Authority's position and relevant laws and thoroughly analyzed the white paper content, including token functions, issuance purpose, and user rights, to review whether the token in question constitutes a security. If the token is deemed to have securities nature, it must comply with various regulations such as disclosure obligations under the Capital Market Act, which could pose a significant legal risk to the company. We provided detailed guidance on this and assisted the company in developing necessary countermeasures. Security Tokens and Investment Contract Securities A security token means issuing the rights of a security in the form of a cryptocurrency using blockchain distributed ledger technology. The Financial Supervisory Authority has operated a securities review committee since February 2022 to determine the investment nature and securities nature of tokens, NFTs, and other virtual assets. If the committee determines that a virtual asset constitutes a security under the Capital Market Act, the virtual asset will be subject to the regulations of the Capital Market Act. Whether or not an investment contract security is involved is important in determining the securities nature of a token. An investment contract security is a type of security governed by the Capital Market Act, and the Capital Market Act defines it as an agreement where a specific investor invests money or other assets in a joint business with the investor and others, and receives the profits or losses from the joint business primarily performed by the other party (Article 4(6) of the Capital Market Act). Therefore, it is desirable to review whether the token meets the requirements of an investment contract security from the project inception stage, conduct business based on this review, and prevent legal risks in the future. Law firm Veat has extensive experience in providing legal advice related to blockchain and virtual assets, and provides legal services reflecting the latest financial regulations and technological trends. In particular, Partner Attorney Ahn Il-woon of Law firm Veat has deep expertise in the blockchain field and actively engages in legal advice and contributions regarding virtual currency and other virtual assets. He has been appointed as a member of the Korea Bar Association's IT Blockchain Special Committee in recognition of his years of experience in the blockchain field. Also, Senior Foreign Attorney Song Woo-seok of Law firm Veat served as a senior legal counsel for Binance, the world's largest virtual asset exchange, and provides legal advice on virtual asset-related issues, anti-money laundering (AML), cross-border M&A, and other matters for numerous domestic and international blockchain projects and exchanges. If you need legal advice regarding virtual assets, the Capital Market Act, or other aspects of blockchain business, please contact Law firm Veat as your legal partner. Thank you. Law firm Veat
Legal Artificial Intelligence (AI) Model and Service Development Contract Review
Law firm Veat reviewed and revised, and proposed negotiation terms for a contract between a legal tech startup A (hereinafter 'client') providing legal artificial intelligence (hereinafter "AI") models and services, and the development company developing the services. AI service development includes important legal considerations in various aspects such as software development contracts for AI-based legal service development, AI development contracts, and AI model development contracts. That is, the AI service itself can be composed of detailed items such as AI model implementation and AI service provision, unlike existing SI development work, and legal review is essential for this. Law firm Veat focused on clearly defining the scope of AI model development and the corresponding responsibilities, and specifying quality and inspection procedures to guarantee the quality of the deliverables. In particular, it thoroughly reviewed detailed items such as how to implement the AI model, the extent of learning to be performed, and how to use data for learning, to ensure that the client does not experience problems due to the scope of work in the future. Also, whether the development company can develop the AI model and use it for other businesses is very important, and this should be reviewed in terms of copyright and trade secret protection. Law firm Veat systematically reviewed clauses regarding ownership of the developed AI model and ownership and usage rights of the training data, and reviewed a contract considering unique considerations such as mutual sharing of materials for AI (AI) model development and training data, and ownership of the completed model. In the case of AI development, it is very important for the development company to secure AI models and learning data through development, and the contract should be reviewed to enable the development company to maintain them, which is important for the development company to perform more advanced AI development based on these materials in the future. Customized legal advice considering unique considerations such as AI model and service is recommended. Since AI development is also a software development service, clearly defining elements such as development scope, development responsibility, quality, and inspection, which are important review items in the development contract, is essential to prevent disputes that may arise during the development process. In particular, in advanced technology fields such as legal AI model and service development, it is possible to prevent disputes that may arise during the development process by clearly defining various unique elements such as mutual sharing of materials for AI model development and ownership of the completed model. Importance of AI Development Contract An AI development contract should clearly define the necessary legal protection and rights in the process of developing and operating AI models. It is a very important element of AI projects to clearly define technology protection, safe use of data, division of roles by development stage, legal responsibility, and regulatory compliance. Law firm Veat, based on its expertise in AI and IT legal advisory services and abundant experience, is helping companies safely and effectively develop and utilize AI technology by minimizing legal risks alongside the advancement of AI technology, and providing solid support to companies pursuing innovation. Law firm Veat includes IT specialist attorneys certified by the Korea Bar Association, partner attorneys Baek Seung-cheol and An Il-woon, and has a unique advantage of simultaneously understanding domain knowledge (domain knowledge) in advanced fields such as artificial intelligence, based on a background in engineering and practical experience in advanced fields. Also, partner attorney Jo Eun-byeol is a member of the Seoul Bar Association’s Special Committee for Artificial Intelligence and Legal Tech Response, and possesses expertise and abundant advisory experience in the fields of artificial intelligence (AI) and legal tech. As a legal expert for the growth of AI-related companies, if you need the best legal advice based on experience and knowledge specialized in the AI industry, such as generative AI, ChatGPT, and LLM technology, regarding various legal issues such as software development contracts, AI development contracts, and AI model development contracts, please contact Law firm Veat. Thank you. Law firm Veat
Law firm Veat’s Eunbyeol Jo, appointed as a member of the Seoul Bar Association’s Artificial Intelligence and Legal Tech Response Special Committee.
Law firm Veat's Eunbyeol Cho, Partner Attorney, has been appointed as a member of the Seoul Bar Association’s Special Committee on Artificial Intelligence and Legal Tech Response. Eunbyeol Cho, Attorney, will take on a new role within the Seoul Bar Association, based on her expertise in the fields of Artificial Intelligence (AI) and Legal Tech and her extensive consulting experience. Eunbyeol Cho, Attorney, is a Partner Attorney specializing in IT and new technologies at Law firm Veat, and has been actively engaged in the related fields, providing legal consultation to general corporations, public corporations, and public organizations. In particular, she has contributed to helping companies minimize legal risks and lead innovation amidst rapidly changing technological environments. The Seoul Bar Association’s Special Committee on Artificial Intelligence and Legal Tech Response was established to address legal issues and challenges arising from the development of Artificial Intelligence and Legal Tech, and is comprised of experts in the field. Eunbyeol Cho, Attorney's appointment is the result of high evaluation of her deep professional knowledge and practical experience by the Seoul Bar Association. Through this appointment, Eunbyeol Cho, Attorney, is planning to actively engage in resolving legal challenges in the field of Artificial Intelligence and Legal Tech and in providing innovative legal services. Thank you.
Venture investment law legal review regarding the appointment of a compliance officer for startup planners.
Law firm Veat received a request from private equity firm A (hereinafter referred to as "the client") to conduct a legal review regarding the appointment of a compliance officer by a startup planner in accordance with the Venture Investment Act. The investment advisory team of Law firm Veat analyzed legislation and actual application cases comprehensively during the legal review process, and presented ways for startup planners to efficiently appoint a compliance officer. Items to check to register as a startup planner A startup planner (accelerator) refers to an entity that primarily conducts nurturing and investment in initial startups. Startup planners provide various supports to help venture companies grow and develop, playing an important role in activating the venture ecosystem. To register as a startup planner, one must have a certain amount of paid-in capital and must have at least two full-time professional staff. In addition, directors must not be disqualified under the relevant laws, the business plan must be a realistically achievable plan, and a business plan that meets the standards specified in the relevant laws and regulations must be submitted. In particular, according to Article 19, Paragraph 2, Sub-item 5 of the “Venture Investment Promotion Act” (hereinafter referred to as the “Venture Investment Act”), to register as a startup planner, a system must be in place to prevent conflicts of interest between the startup founder and investor, and between a specific investor and another investor. Also, according to Article 1, Paragraph 2, Sub-item 2 of the Startup Planner Registration and Management Rules, a startup planner must designate at least one compliance officer who checks and supervises compliance with the internal control standards. This compliance officer must be a full-time employee, and a part-time employee or a short-term employee under the “Act on the Protection of Fixed-Term and Part-Time Employees” (hereinafter referred to as the “Part-time Employee Act”) cannot be appointed as a compliance officer. According to the interpretation of the laws and the authoritative interpretations of the relevant ministries, if the conditions for appointing a compliance officer are met, it is also possible to designate a person who has been designated as a full-time professional employee at the time of registering as a startup planner. Also, even if a person holds multiple positions, if they are a full-time employee of a startup planner, they can be appointed as a compliance officer. Practically, whether or not it is possible to be appointed as a compliance officer and whether or not it is possible to register as a startup planner can be confirmed through legal professionals with a deep understanding of corporate law and the Venture Investment Act and with extensive practical experience, so as to reduce the legal risks that may arise during the process. Law firm Veat also provides comprehensive legal advice necessary for operating venture capital (VC), systematically supporting all processes from investment strategy development to legal due diligence, contract drafting and negotiation, and post-management. Law firm Veat has achieved outstanding results in legal advice related to startups and venture investment. It has been selected as a finalist in three categories – ‘Korea Deal Firm of the Year’, ‘Boutique Law Firm of the Year’, and ‘Managing Partner of the Year’ – at the ‘ALB Korea Law Award 2023’ hosted by the legal business media Asian Legal Business (ALB), demonstrating its expertise. This achievement confirms the high quality of legal services provided by Law firm Veat and the high customer satisfaction. If you need legal advice on private equity (PEF) regarding the appointment of a compliance officer for a startup planner, please contact Law firm Veat. Thank you. Law firm Veat
Risk legal review when promoting overseas companies with potential violations of the Act on the Control and Punishment of Gambling. Law firm Veat
Law firm Veat received a request from domestic entity A (hereinafter referred to as "the client") involved in Web3 cryptocurrency, and reviewed the legal risks associated with entering into a partnership agreement with an overseas entity potentially violating domestic laws and promoting the entity's business. We primarily reviewed the possibility of violation of the Act on Regulation of Gambling and the associated risks regarding the client's business promotion. We thoroughly reviewed whether the services or products provided by the overseas entity constituted gambling activities. If the entity's business involved gambling, promoting it domestically could potentially violate the Act on Regulation of Gambling. Law firm Veat meticulously analyzed the legal risks that could arise during the process of the domestic entity promoting the overseas entity’s business, particularly considering the possibility of the promotional activities being interpreted as encouraging or participating in gambling activities. We also suggested opinions regarding whether the client could argue that it was unaware of the overseas entity’s business content if a clause restricting promotional targets to legitimate fields was included in the contract with the overseas entity. What is Gambling? Act on Regulation of Gambling Article 2 Paragraph 1: “Gambling” means the act of collecting assets or property interests (hereinafter referred to as "assets") from multiple people and determining gains and losses through a random method, resulting in property interests or losses. The Act on Regulation of Gambling is a law enacted to regulate gambling activities domestically and prevent illegal acts. Violating the Act on Regulation of Gambling can result in severe punishment. If an overseas entity operates a business that violates the Act on Regulation of Gambling, even the act of promoting it can become a legal issue. Therefore, domestic entities must comply with this law when entering into contracts with overseas entities. To reduce the possibility of violating the Act on Regulation of Gambling, we recommended clearly limiting the promotional targets through contracts and promoting only legitimate businesses that do not constitute gambling activities. We also implemented thorough preliminary reviews and continuous monitoring of the overseas entity's business content and promotional activities to prevent legal issues and provided ongoing legal advice before and after contract negotiations to support the client in complying with the Act on Regulation of Gambling and other relevant laws. Law firm Veat provided thorough legal advice to resolve these complex legal issues, minimize legal risks, and safely enter into contracts with overseas entities. It is necessary to clearly understand the scope of application and importance of the Act on Regulation of Gambling. We recommend seeking professional legal advice regarding the Act on Regulation of Gambling for stable business operations. Law firm Veat has accumulated numerous case experiences through legal advice related to the Act on Regulation of Gambling. In particular, we have provided regulatory advice on new forms of games and entertainment services combined with the latest technology, supporting startups and IT companies to minimize legal risks and operate their businesses stably. If your company needs professional advice on sensitive legal issues such as the Act on Regulation of Gambling, please feel free to contact Law firm Veat. Thank you. Law firm Veat
An Il-un Partner Attorney, Jeon Yong-hwan Senior Attorney, Introducing Law firm Veat to shareholder management platform ZUZU
An Il-woon Partner Attorney and Jeon Yong-hwan Senior Attorney of Law firm Veat's interview was detailedly introduced in Codebox's B2B solution ZUZU for Law firm Veat. ZUZU is Codebox's B2B solution that conveniently handles shareholder register management, shareholder meeting management and board of directors tasks, along with investment management, compensation management, and other tasks that most startups struggle with, saving time on company operations. Please refer to the link below for detailed information about the interview. If you require startup legal consultation or regular legal consultation related to this interview, please contact Law firm Veat. An Il-woon Partner Attorney and Jeon Yong-hwan Senior Attorney of Law firm Veat introduced Law firm Veat's strengths, advice for startups, and memorable consultation cases in this interview. Frontier creating a framework for growth of venture companies, Law firm VEAT - 1st shareholder management service, ZUZU(Shareholder) When startups are conceiving a business, they encounter various regulations. I would like to say that it is not easy to find a breakthrough in conducting business by targeting gaps in areas where existing regulations are already quite entrenched. On the other hand, fields such as blockchain and AI are new businesses starting with newly emerged technologies, so there may be no regulations, or if they exist, they may be somewhat relaxed. For new businesses that did not exist before, it is better to have a legal review first rather than just starting with an idea to mitigate legal risks. Through a professional's review, you can find out whether there are any regulations and how much legal risk there is, and if regulations exist, you can also examine whether it can be resolved through systems such as regulatory sandbox. Source : ZUZU(https://zuzu.network) An Il-woon Partner Attorney is a Korean Bar Association Certified IT Specialist Attorney, majoring in computer engineering and working as a developer at a large corporation. He also serves as a ICT startup legal mentor attorney of the Ministry of Science and ICT, and a curriculum innovation committee member of Yonsei University’s Artificial Intelligence Convergence College, exhibiting expertise that combines theory and practice, providing legal consultation to a variety of companies, including IT companies, and providing efficient legal consultation necessary for the growth of startups. Jeon Yong-hwan Senior Attorney is a dedicated legal service attorney for startup support of the Ministry of SMEs and Startups, majoring in physics and having extensive experience in ICT regulatory sandbox and demonstration service legal consultation at organizations such as the Korea Information and Communication Technology Promotion Agency and the Korea Land and Infrastructure Technology Promotion Agency, understanding the difficulties of tech-based startups and swiftly identifying legal issues and providing legal consultation. Thank you. Law firm Veat
Legal review of lending funds through Loan Agreements with overseas investors.
Law firm Veat received a request from data-driven company A (hereinafter "Client") to review the legal aspects of foreign exchange transaction reporting necessary for lending funds through a Loan Agreement with an overseas investor. The Client intended to enter into a Loan Partnership Contract with an overseas investor under the condition of borrowing a specific amount of funds for 7 years. The foreign exchange reporting center of Law firm Veat reviewed whether foreign exchange transaction reporting was required when a domestic corporation borrows foreign currency funds from an overseas investor. The foreign exchange reporting center of Law firm Veat explained that the transaction must be reported in accordance with foreign exchange transaction regulations, and while it may vary depending on the internal regulations of a designated foreign exchange bank, there is a high probability of post-reporting for each borrowing if the funds are typically paid in installments over a certain period. Also, if the Client has already conducted overseas investment in accordance with the "Foreign Investment Promotion Act," it may be subject to pre-reporting and registration as a foreign investment enterprise, and it may also apply to cases where a local corporation or overseas branch borrows funds for use abroad. Therefore, we informed them that separate foreign exchange transaction reporting laws such as the "Foreign Investment Promotion Act" may apply or additional reporting may be necessary. Importance of Foreign Exchange Transaction Reporting and Overseas Investment Reporting If a resident corporation engages in profit-making activities and wishes to borrow foreign currency funds from a non-resident, it must report the transaction to the head of a designated foreign exchange bank within one month from the date of receipt of the funds (Article 7-14(1)(3) of the Foreign Exchange Transaction Regulations of the Foreign Exchange Transaction Act). Prior to July 4, 2023, it was subject to pre-reporting, but has been changed to post-reporting after the revision. Foreign exchange transaction reporting is necessary to minimize legal risks that may arise from monetary lending transactions with overseas investors and to ensure transparent transactions. Foreign exchange reporting is closely related not only to the "Foreign Exchange Transaction Act" but also to the "Foreign Investment Promotion Act," which is a law related to overseas investment. We recommend that you carefully review with legal professionals who have a deep understanding of the reporting practices and relevant laws related to foreign exchange transactions and overseas investment. The foreign exchange transaction reporting attorneys of Law firm Veat thoroughly review the matter to assist in the smooth progress of foreign exchange transaction reporting, including determination of reporting eligibility, preparation of necessary documents, and reporting agency. The foreign exchange reporting center of Law firm Veat has helped the Client’s successful foreign exchange reporting based on years of experience and expertise to solve complex legal issues related to foreign exchange transactions and overseas investment. As a result, the Client was able to reduce unnecessary time and costs and prevent violations, allowing for efficient overseas investment. If you require professional and efficient legal advice regarding difficulties related to foreign exchange transaction reporting and overseas investment reporting, please contact the foreign exchange reporting center of Law firm Veat to proceed with smooth overseas investment in a complex regulatory environment. Thank you. Sincerely, Law firm Veat
Review of the possibility of corporate merger notification for stock acquisition of an investment partnership under the Civil Act
Law firm Veat received a request from Investment Combination A (hereinafter “Client”) to conduct a business combination filing related to the acquisition of shares of the investment combination. According to the Civil Law, a combination is a non-corporate entity and, as a general rule, cannot be the subject of a combination filing. However, there are specific situations where a combination under the Civil Law can be the subject of a business combination filing if an affiliated company that predominantly owns the combination acts as the filing company, and a thorough review of how to define and divide the relevant market was necessary. The investor advisory team of Law firm Veat provided detailed legal advice based on its extensive investment legal advisory experience to ensure accurate filing and approval in accordance with the “Act on Regulation of Fair Trade and Advertising” (hereinafter “Fair Trade Act”) required when proceeding with a business combination through share acquisition. Why an investment legal expert is needed in business combination Business combination (M&A) is one of the growth strategies for companies to enhance competitiveness and increase market share, and it means the combination of companies where the independence of individual companies disappears and decision-making regarding business activities is integrated. The Fair Trade Act classifies business combinations into 5 types (share acquisition, concurrent appointment of directors, merger, transfer of business, participation in company establishment). The Fair Trade Commission requires companies with assets or sales of 300 billion won or more to mandatorily file a business combination if the filing company has assets or sales of 3,000 billion won or more, or the counterparty company has assets or sales of 300 billion won or more, in order to prevent business combinations that may create a monopoly. Business combination filings can be classified into general and simplified filings, and the Fair Trade Commission comprehensively reviews market concentration, ease of entry, utility, and adjacent markets as merger types. Filing a business combination can verify whether a merger is valid, and in this process, a merger may be impossible or delayed if a prohibition or corrective order is received. Therefore, it is important to discuss the relevant laws and judgments with a legal expert who well understands the business combination filing-related laws to prevent additional time and costs from being wasted by failing the filing or receiving a corrective order. The specific filing method and procedure may vary depending on the type of business combination, and the investor advisory lawyers of Law firm Veat understand these complex procedures and content and support the Client to ensure that the business combination proceeds smoothly within a complex regulatory environment. Law firm Veat demonstrates excellent expertise in the M&A sector, based on the performance of achieving 2nd place in the Bloomberg league table Q1 2023 in terms of the number of transactions, and shows itself as a leader in various M&A, including large-scale deals, medium-sized M&A deals, investment attraction for startups and venture capital (VC), and joint investments. If you need help with business combination filings, establish a solid foundation through the legal services provided by the investor advisory lawyers of Law firm Veat. Thank you. Law firm Veat