Virtual Assets Lawyer
Virtual Assets Lawyer | Compliance advice and dispute resolution for crypto matters
Virtual asset law in Korea now spans two very different needs: (1) regulatory compliance for exchanges, custodians, and token issuers under the Act on Protection of Virtual Asset Users (가상자산 이용자 보호 등에 관한 법률, "VAUPA"), and (2) dispute resolution when a user loses assets to hacking, phishing, exchange insolvency, or an unfair freeze. Whether you are a business seeking a legal opinion before launch, or an individual trying to recover stolen coins, the applicable rules and available remedies differ sharply depending on which side of the transaction you are on. This page walks through both tracks so you can see where your situation fits.
Virtual Assets | What VAUPA actually requires from exchanges and issuers
Since VAUPA took effect, virtual asset service providers face concrete obligations around user asset segregation, insurance/reserves, and market abuse rules. Businesses planning a listing, token sale, or exchange operation in Korea need a compliance review before, not after, launch.
Segregation and safekeeping of user assets
Virtual asset operators must keep user deposits separate from company assets and hold a minimum proportion of user assets in cold wallets, and must maintain insurance or reserve funds against hacking and system failure (가상자산이용자보호법 제6조, 제7조). Whether a given custody structure satisfies this is a common point of dispute when an exchange later fails.
Market abuse: unfair trading practices
VAUPA prohibits the use of undisclosed material information, price manipulation, and deceptive trading in virtual assets, mirroring insider trading and market manipulation concepts from securities law (가상자산이용자보호법 제10조, 제11조, 제12조). Violations carry criminal penalties, so exchanges, market makers, and even individual traders with large positions should get advice before running promotional or liquidity programs that could be read as manipulation.
Token issuance and whether a token is a 'security'
Before issuing a token or running an ICO-style sale, the threshold question is whether the token itself functions as a security under the Financial Investment Services and Capital Markets Act, which would trigger a separate, stricter registration regime (자본시장과 금융투자업에 관한 법률 제4조). This analysis is fact-specific and depends on the actual rights the token confers, not just how it is labeled in a whitepaper.
Virtual Assets | When an exchange freezes your account or delists a coin
A large share of virtual asset disputes never involve theft at all — they arise from an exchange freezing withdrawals, delisting a token without adequate notice, or refusing to process a transaction flagged as suspicious. These disputes turn on the exchange's terms of service and duty of care.
Account freezes and AML holds
Exchanges routinely freeze accounts that trigger anti-money-laundering flags under the Act on Reporting and Using Specified Financial Transaction Information (특정 금융거래정보의 보고 및 이용 등에 관한 법률). Whether the freeze was justified depends on the specific transaction pattern and how promptly the exchange communicated the reason, which can be challenged through a civil claim if funds remain frozen without adequate basis.
Delisting and sudden trading halts
When an exchange delists a token or halts trading, the key question is whether its own user agreement gave it discretion to do so and whether adequate notice was provided. Users who suffered losses from an abrupt delisting may have a claim for breach of the terms of service or, in serious cases, unfair trade practices under VAUPA's investor protection provisions.
Exchange insolvency and user asset priority
If an exchange becomes insolvent, VAUPA's asset segregation rules are designed to let users recover their own deposited assets ahead of general creditors, but this depends heavily on how cleanly the operator actually kept user funds separate in practice (가상자산이용자보호법 제7조). This is an area where the paper compliance and the actual account structure can diverge significantly, which is exactly what gets tested in an insolvency proceeding.
Virtual Assets | Recovering assets lost to hacking, phishing, or investment scams
Where coins are stolen through hacking, phishing, or a fraudulent investment scheme, the practical path to recovery is different from ordinary regulatory disputes. Speed matters, because tracing on-chain movement and freezing an exchange account before funds are cashed out is often the only realistic chance of recovery.
Criminal complaint and asset tracing
Theft of virtual assets through hacking or unauthorized access can be prosecuted under the general fraud and computer-related crime provisions (형법 제347조, 제347조의2), and a criminal complaint can prompt investigators to request account freezes at exchanges where the stolen coins were moved. Filing quickly, with a clear transaction log and wallet addresses, materially improves the chance that an exchange account can be frozen before withdrawal.
Civil claims against the platform or scheme operator
Separately from a criminal complaint, victims can pursue a civil claim for damages against the person who defrauded them or, in some cases, against a platform that facilitated the fraud through inadequate verification procedures (민법 제750조). Whether the platform itself bears any liability depends on what due diligence it was reasonably expected to perform.
Investment scams and Ponzi-style token schemes
Many 'guaranteed return' token investment schemes are structured as unregistered fundraising, which can trigger liability under both the Act on the Regulation of Conducting Fund-raising Business Without Permission (유사수신행위의 규제에 관한 법률) and ordinary fraud provisions. Because organizers often move quickly to dissipate funds, an early asset preservation request alongside the criminal complaint is often necessary to have anything left to recover.
Virtual Assets | From initial consultation to resolution
We review your transaction history, wallet addresses, exchange communications, or (for businesses) your token structure and business model, to identify what type of case this actually is.
For compliance matters, we assess the applicable VAUPA and capital markets requirements and draft a legal opinion or compliance plan. For disputes, we assemble on-chain evidence and correspondence with the platform.
Depending on the case, this may mean filing a criminal complaint for hacking/fraud, sending a formal demand letter to an exchange, filing a civil claim for damages, or submitting a regulatory inquiry.
Many exchange disputes resolve through negotiation once a formal claim is presented; fraud and hacking cases typically proceed through the police investigation in parallel with any civil claim.
We monitor the outcome of asset freezes, settlement offers, or judgments, and advise on enforcement if a judgment is obtained but the counterparty does not pay voluntarily.
Virtual Assets | How fees are set
An initial review fee may apply for complex compliance opinions or multi-exchange tracing cases, distinct from a simple case assessment.
Set based on the complexity of the matter — a compliance opinion for a token launch differs significantly in scope from a hacking recovery case involving multiple jurisdictions or exchanges.
For recovery or damages cases, a success fee may be structured as a percentage of assets actually recovered or damages actually awarded, agreed in advance.
Businesses seeking ongoing compliance support (e.g., before a listing or fundraising round) may retain us on an ongoing advisory basis rather than a per-matter fee.
Costs such as blockchain forensic analysis fees, court filing fees, and expert reports are billed separately from the legal fee itself.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Virtual Assets | Self-Check by Situation
1️⃣ For victims of hacking or phishing
- Do you have a complete record of the wallet addresses involved and the timing of each transfer?
- Have you already reported the incident to the exchange and requested an account freeze on the receiving end?
- Do you have screenshots or logs of any phishing message, fake site, or social engineering contact?
- Has more than a short period passed since the theft — every day increases the chance the coins are cashed out?
2️⃣ For users disputing an exchange
- Did the exchange provide any written reason for the freeze, delisting, or withdrawal refusal?
- Have you reviewed the exchange's terms of service for the specific clause it is relying on?
- Do you have records of your deposit history and account balance before the dispute arose?
- Have you already filed a formal complaint through the exchange's customer center, and what was the response?
3️⃣ For businesses planning a token launch or listing
- Have you assessed whether your token could be classified as a security under capital markets law?
- Does your custody structure meet VAUPA's user asset segregation and cold-wallet requirements?
- Have your marketing materials been reviewed for statements that could be read as guaranteeing returns?
- Do you have a compliance opinion on file before approaching an exchange for listing?
4️⃣ For victims of investment scams
- Did the scheme promise a fixed or guaranteed return regardless of market performance?
- Do you have the promotional materials, contracts, or chat logs used to solicit your investment?
- Are there other victims you are aware of, and would a joint criminal complaint be feasible?
- Has the organizer already stopped responding or started moving funds, suggesting urgency for asset preservation?
