Review of the Securities Nature of Virtual Assets Applied with Blockchain New Technology

Law firm Veat received a request from Company A (hereinafter referred to as "the client"), which operates a decentralized platform based on blockchain technology, to review the securities status of virtual assets issued using zero-knowledge proof technology.

​Law firm Veat's Virtual Asset Team thoroughly reviewed whether the virtual asset of the project in question qualifies as a financial investment product under the "Act on Capital Markets and Financial Investment Activities" (hereinafter referred to as "the Capital Market Act"), and further, whether it constitutes securities. In particular, the team focused on whether it falls under the definition of a specific investment contract security, and prepared legal review opinions in Korean and English, taking into account the domestic and international legal environment.

​Law firm Veat's Virtual Asset Team comprehensively analyzed the design and structure, trading method, and investor protection measures of the virtual asset, based on Veat’s unique know-how gained from reviewing various virtual asset cases, and supported the client in preventing legal risks in advance.

Necessity of Reviewing Securities Status for New Forms of Blockchain Business and Virtual Asset Trading

Zero-knowledge proof (zk-SNARKs), which has emerged along with the recent development of blockchain technology, is a revolutionary technology that is attracting attention for guaranteeing the anonymity of digital assets while maintaining verifiability. Blockchain platforms based on this technology are steadily emerging, leading to new forms of blockchain business and virtual asset trading.

​However if a virtual asset is deemed a security, it will be subject to the regulations of the Capital Market Act, which has significant legal implications for both the issuer and the investors.

​Therefore, we recommend that you have these virtual assets reviewed by legal experts with a deep understanding of virtual asset reviews.

Law firm Veat specializes in legal advice related to various blockchain businesses, such as blockchain, virtual assets, and NFTs. In particular, Partner Attorney An Il-woon serves as a certified IT specialist attorney by the Korea Bar Association and as a member of the Korea Bar Association Blockchain Special Committee, actively dealing with legal issues related to blockchain technology and virtual assets through advisory and contribution activities.

Law firm Veat has numerous legal advisory cases in the blockchain and virtual asset fields, including virtual asset exchange operating policies, ICO and listing processes, and legal review of the securities status of virtual assets, and helps secure the legal stability of clients' businesses through various review cases.

If you need legal advice on blockchain businesses, such as the securities status of virtual assets, please contact Law firm Veat.

Thank you.
Law firm Veat