Legal Advisory on U.S. Broker-Dealer License Requirements

A Korean fintech startup (the “Client”) planned to launch a blockchain-based investment platform targeting U.S. investors, with the goal of raising capital for private funds. The business model included charging both fund management fees and separate platform usage fees based on the size of capital raised.

A key legal issue arose as to whether the platform usage fee—structured in proportion to the amount of capital raised—would trigger the requirement to obtain a Broker-Dealer license from the U.S. Securities and Exchange Commission (SEC). Additionally, the Client needed a clear legal assessment regarding the compliance of its fund management and performance fee model under U.S. securities regulations.

Cha & Kwon Law Offices collaborated with a U.S. securities law expert to conduct a detailed analysis of the Client’s fee structure. It was determined that if the platform fee was linked to the success of securities transactions, obtaining a Broker-Dealer license would likely be mandatory. The Client was advised to restructure the fee model to reduce regulatory risk. Furthermore, specific legal conditions were provided to ensure that fund management and performance fees could be lawfully received in the Client’s capacity as a General Partner.

As a result of this advisory, the Client adopted a revised compensation model that minimized legal exposure and successfully prepared for the U.S. platform launch. In addition, a clear and compliant contractual framework was established in line with U.S. Broker-Dealer regulations and investor protection principles, thereby mitigating the risk of future legal disputes.

For professional legal advisory services on U.S. securities regulations, Broker-Dealer licensing, and private fund structuring and operations, please contact Cha & Kwon Law Offices. Our team of experts is ready to provide the optimal legal solutions.

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