Is the specific virtual asset transaction support act of a virtual asset business operator illegal?
Article posted in 2024-10-11 10:07:41 | VEAT
Law firm Veat performed legal consultation regarding whether the virtual asset business operator’s support for specific virtual asset transactions infringes upon domestic laws.
Accordingly, Law firm Veat conducted in-depth reviews to determine whether the actions of the business operator violate the “Act on Reporting and Use of Specific Financial Information” (hereinafter referred to as the “Specific Financial Information Act”) and the “Act on Protection of Virtual Asset Users” (hereinafter referred to as the “Virtual Asset User Protection Act”).
Review of the Specific Financial Information Act
Article 18(Measures of Virtual Asset Business Operators) of the Specific Financial Information Act A virtual asset business operator shall take measures as stipulated in Article 1, Paragraph 1 and Article 1-2, including separating and managing transaction records on a customer-by-customer basis as stipulated in Presidential Decree, etc. Article 10-20-2 of the Enforcement Decree of the Act The “measures” in Article 18 shall mean the measures stated in the following subparagraphs: Regulations on Reporting and Supervision of Specific Financial Information, Article 28 (Measures of Virtual Asset Business Operators) Law firm Veat, based on a deep understanding of virtual asset-related technology, provided guidance to the client regarding whether the virtual asset the client intends to support in transactions corresponds to a darkcoin, and advice on the obligations the client must comply with under the Specific Financial Information Act. The Virtual Asset User Protection Act prohibits a virtual asset business operator from trading, or other transactions, of a virtual asset issued by itself, its spouse, or relatives within six degrees of kinship (hereinafter referred to as “special relationship persons”) (Article 10(5) of the Act), and stipulates that a sentence of up to 10 years of imprisonment with labor or a fine equivalent to three to five times the profit obtained or loss avoided by the violation shall be imposed (Article 19(2) of the Act). In this case, Law firm Veat reviewed whether the virtual asset the client intends to support in transactions corresponds to a virtual asset issued by itself or a special relationship person, to provide the client with guidelines so that the client can avoid illegal transaction support acts. Law firm Veat provides optimized solutions to clients based on a deep understanding of virtual asset-related laws, so if you need virtual asset-related legal advice, please receive professional legal advice from Law firm Veat. Thank you. Law firm Veat
6. Any measures equivalent to those stated in subparagraphs 1 to 5, and measures designated and announced by the Financial Intelligence Unit for transparent virtual asset transactions
In Article 10-20(6) of the Enforcement Decree, “measures designated and announced by the Financial Intelligence Unit” means the measures stated in the following subparagraphs.
2. A virtual asset business operator must verify whether a virtual asset has a technology inherent in it that prevents transmission records from being identified when a virtual asset is transferred from one virtual asset address to another, and manage not to handle the virtual asset if the operator becomes aware of it.
According to the Specific Financial Information Act, a virtual asset business operator must verify whether a virtual asset has a technology inherent in it that prevents transmission records from being identified when a virtual asset is transferred from one virtual asset address to another (so-called “darkcoin”), and must manage not to handle the virtual asset if the operator becomes aware of it, and regulations stipulate that a fine of up to 100 million won may be imposed for failing to take such measures (Article 20(1)(3) of the Act).
Article 10 (Prohibition of Unfair Trading Practices, etc.) ⑤ A virtual asset business operator shall not engage in trading, or other transactions, of a virtual asset issued by itself or a person in a special relationship as defined in Presidential Decree, unless it falls under any of the following cases:
1. A virtual asset issued as a means of payment for specific goods or services, and the virtual asset business operator provides specific goods or services promised to the user, and acquires the virtual asset in return.
2. A case where a virtual asset business operator inevitably acquires a virtual asset due to the characteristics of the virtual asset, and follows procedures and methods determined by Presidential Decree for preventing unfair trading practices or conflicts of interest with users.