Opinion letter drafting on sales structure for Fintech companies

Law firm Veat drafted an opinion regarding Fintech company A's (hereinafter referred to as "the client") business structure, helping the client prevent legal issues in transactions with domestic and foreign financial institutions.

Regarding the client's business of receiving fees from domestic banks and securities firms upon account opening and the business of receiving fees from overseas virtual asset exchanges, Law firm Veat's Fintech team focused on reviewing the legality of the following:

• Whether the actions constitute sales agency mediation under the Act on the Protection of Financial Consumers (hereinafter referred to as "Financial Consumer Protection Act")

The Financial Consumer Protection Act imposes strict regulations on sales agency and mediation of financial products. Therefore, Law firm Veat reviewed whether the client's business of receiving fees from domestic banks and securities firms upon account opening constitutes sales agency and mediation of financial products under the Financial Consumer Protection Act.

• Whether the actions constitute virtual asset buying and selling mediation under the Act on Reporting and Use of Specific Financial Information (hereinafter referred to as "Specific Financial Information Act")

Since actions related to the buying and selling of virtual assets may qualify as a virtual asset business operator, Law firm Veat's Fintech team reviewed whether the client's business of receiving fees from overseas virtual asset exchanges constitutes virtual asset buying and selling mediation as defined in the Specific Financial Information Act. This helped the client determine the necessity of registering as a virtual asset business operator and supported compliance with related regulations.

• Review of potential violations of the Anti-Money Laundering (AML) system

Law firm Veat's Fintech team reviewed whether the client's business structure could violate the Anti-Money Laundering (AML) system and provided legal advice.

What is the Anti-Money Laundering (AML) system?

The Anti-Money Laundering (AML) system is an institutional mechanism established to detect and prevent illegal money laundering domestically and internationally.

​The Specific Financial Information Act defines money laundering as actions to conceal the fact of acquiring and disposing of illegal assets, or concealing such assets, or actions to acquire and dispose of assets for tax evasion, and defines these actions as criminal acts under the Act on Regulation and Punishment of Concealment of Criminal Proceeds.

As Fintech companies' business models can be subject to various regulations, we recommend obtaining comprehensive legal reviews from a Fintech lawyer before proceeding with related businesses to ensure stable business operations.

Law firm Veat has been recognized by THE LEGAL 500, an international law firm capability assessment agency, as a law firm to watch in the 'Fintech Financial Services/Technology-Based Startup Advice' field.

In particular, Song Woo-seok, Senior Foreign Counsel, who served as Senior Counsel to Binance, a global virtual asset exchange, possesses high expertise in the virtual asset field and provides legal advice on virtual asset-related issues and Anti-Money Laundering (AML) based on his experience advising numerous domestic and international blockchain projects and exchanges.

If you require comprehensive legal advice regarding Fintech and virtual assets, please contact Law firm Veat.

Thank you.

Law firm Veat