Concerned about the legality of its advertising activities and potential penalties, a Korean client inquired about the permissibility of placing on its website advertisements for overseas cryptocurrency exchanges and virtual currency casinos.
In Korea, general advertising matters are regulated by the Display and Advertising Act, but the Financial Consumer Protection Act and the Financial Supervisory Service’s Financial Advertising Regulatory Guidelines apply to advertisements for financial products. In addition, the Information and Communications Network Act also deals with matters related to advertisement of illegal services. Therefore, it was necessary to identify the specific contents of the services to be advertised and review the illegality of each of them first. Then, we proceeded to review how and whether any service violates any of the various laws and regulatory guidelines with an integrated approach.
D’Light reviewed whether there is a possibility that the Specific Financial Information Act can be applied to virtual asset exchanges and whether virtual assets traded on cryptocurrency exchanges are financial products. We also reviewed whether the services provided by the virtual currency casinos, if offered in Korea, would be in violation of the relevant Korean laws and regulations. Based on such reviews, we finally analyzed and advised on the potential violation of the various laws and regulations of the website advertisements. We also advised on the possibility of the website operators’ potential liability due to the advertising activities. Lastly, we have provided the checklist for evaluating the legality of the future advertisement opportunities.