Virtual asset business operator and Special Financial Information Act related trading bot business structure review

Law firm Veat received a request from a virtual asset management service provider A (hereinafter “Client”) to review the business structure of registering automated trading signals (trading bots) on a virtual asset exchange and receiving usage fees.

The Client, which does not directly handle virtual assets, was planning a business structure of registering trading bots on overseas virtual asset exchanges and receiving fees paid by users in virtual assets.

The Law firm Veat blockchain team comprehensively reviewed the Client’s legal issues, including whether there were any problems with the business structure, whether reporting was required domestically when conducting transactions with overseas virtual asset exchanges, and whether there were any anti-money laundering issues, with reference to the “Act on Reporting and Use of Specific Financial Transaction Information” (hereinafter “Specific Financial Transaction Information Act”) and other related laws, the Financial Intelligence Unit’s latest press releases, and a collection of anti-money laundering rulings.

In particular, we explained in detail to the Client the parts reviewed based on the Law firm Veat’s specialized know-how in blockchain business, in addition to the Client’s business structure and the parts necessary for the Client.

Things to Check When Conducting Business as a Virtual Asset Business

According to Article 1 Paragraph 1 Sub-paragraph (c) of the Specific Financial Transaction Information Act, a “virtual asset business operator” is defined as one who performs businesses such as trading, exchange, transfer, custody, management, brokerage, or arrangement using virtual assets.

Even if virtual assets are not directly received, if you are conducting a business that handles virtual assets, you may be considered a virtual asset business operator, so we recommend that you receive a legal review of virtual assets.

To be recognized as a virtual asset business operator, you must go through the registration and registration procedures with the Financial Supervisory Service and comply with anti-money laundering (AML) obligations. Therefore, it is important to carefully review with a virtual asset lawyer detailed content such as whether the business structure corresponds to a virtual asset business operator under the Specific Financial Transaction Information Act, whether the business method violates related laws, and what the registration procedures will be in order to set the business direction.

Law firm Veat is assisting various virtual asset and blockchain-related companies as legal advisors/counselors, and in particular, Senior Foreign Attorney Song Woo-seok of Law firm Veat previously served as a senior legal counsel for Binance, a global virtual asset exchange, and has provided expert legal advice on virtual currency-related issues, anti-money laundering (AML), and cross-border M&A for numerous domestic and international blockchain projects and exchanges.

If you need legal advice on whether you are a virtual asset business operator and registration procedures, etc. for blockchain business, please contact Law firm Veat.

Thank you.

Law firm Veat