Dongin Secures Acquittal in Foreign Exchange Transactions Act Appeal Involving Virtual Assets

Appellate Court Overturns One-Year Prison Sentence, Grants Full Acquittal

Law Firm Dongin announced on the 31st that it had secured a full acquittal for the defendant in the appellate trial of a Foreign Exchange Transactions Act violation case, where the defendant had previously been sentenced to one year in prison in the first trial.

Doin Law Firm

According to Dongin, on August 26, the Suwon District Court overturned the original conviction and found Mr. A, who had been charged with violating the Foreign Exchange Transactions Act, not guilty.

Mr. A was indicted for receiving virtual assets from a foreign remittance client, converting them into won at a domestic virtual asset exchange, and then transferring the funds to a domestic recipient through his own account. Investigations found that Mr. A had carried out approximately 700.67 million won in transactions over a total of 24 occasions. Prosecutors argued that he engaged in foreign exchange business between Korea and another country regarding payments and receipts, without registering with the Minister of Economy and Finance.

Dongin attorneys Seungwoo Cho (Judicial Research and Training Institute, 30th class) and Boyoung Lee (10th bar exam) argued in the appellate trial, "The mere fact that virtual assets sent from a foreign virtual asset exchange were converted into won at a domestic exchange does not automatically constitute a 'foreign exchange business' under the Foreign Exchange Transactions Act."

They particularly pointed out the lack of evidence to support whether the virtual assets were purchased overseas using foreign currency. To establish a violation of the Foreign Exchange Transactions Act, it must be specifically demonstrated that the virtual assets sent by the overseas remitter were obtained through transactions involving foreign exchange.

The appellate court accepted the defense’s argument. The court judged that, based only on the evidence submitted by the prosecution, it was difficult to confirm whether the virtual assets received by the defendant were related to foreign exchange, and it could not be concluded that the defendant was aware of this. As a result, the court found there was insufficient evidence to dispel reasonable doubt on the charges and issued a not guilty verdict.

Attorney Cho stated, "This ruling demonstrates that a transaction involving virtual assets does not automatically constitute 'foreign exchange business' under the Foreign Exchange Transactions Act," adding, "It is significant in confirming the need for evidence regarding the specific transaction structure and the circumstances under which the virtual assets were acquired."

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