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The Short Answer
If you operate a crypto referral program targeting Korean users — or if your exchange pays Korean-based marketers to bring in Korean retail customers — you are operating in a legally sensitive zone under Korean law. Whether you cross the line depends on the structure of your arrangement, not just where your company is incorporated.
This is not theoretical. Korea’s Financial Intelligence Unit (KoFIU) has publicly stated that referral and marketing intermediary activity can constitute regulated virtual asset business under the Act on Reporting and Using Specified Financial Transaction Information (“SFTIA”). At Cha & Kwon Law Offices, we have advised clients on exactly this question — and the legal analysis is more nuanced than most operators expect.
How Korean Law Classifies Referral Activity
Korea’s SFTIA defines a Virtual Asset Service Provider (VASP) as any entity that, as a business, engages in buying or selling virtual assets; exchanging virtual assets; transferring virtual assets; safekeeping or administering virtual assets; or brokering, arranging, or acting as agent for the above activities.
That final category — brokering and arranging — is where referral programs create legal exposure. A referral operator that connects Korean users to an unregistered overseas exchange, and receives commission tied to those users’ trading activity, is doing something structurally similar to brokering or arranging virtual asset transactions. KoFIU has reinforced this interpretation, signaling that referral and marketing intermediary activities can qualify as VASP activity depending on their substance. The regulator looks at what is actually happening — not the label the parties put on the arrangement.
Two Scenarios: Where the Legal Line Falls
Scenario A — Lower Risk: Independent Referral
A Korean platform independently introduces users to a foreign exchange — without the exchange actively marketing to Korean users, without the exchange providing customized promotional materials to the Korean partner, and without commission tied to the exchange’s deliberate acquisition of the Korean market.
In this scenario, the overseas exchange is not conducting regulated business in Korea. Because Korean criminal law requires the primary offense (an unregistered VASP operating in Korea) to exist before aiding and abetting liability can attach, a genuinely independent referral operator faces lower legal exposure. The referral operator itself, if not holding, transferring, or exchanging assets, may also fall outside the VASP definition.
Scenario B — Higher Risk: Exchange-Directed Marketing
The overseas exchange provides dedicated referral codes, marketing scripts, localized Korean-language promotional content, or performance-based commission structures designed to grow its Korean user base. The Korean partner is, in substance, operating as the exchange’s Korean marketing arm.
Here, the exchange is effectively conducting business targeting Korean users — triggering KoFIU registration obligations regardless of where the exchange is incorporated. The SFTIA’s extraterritorial provisions apply to foreign entities that provide Korean-language services or actively acquire Korean users. The Korean referral operator in this structure faces exposure as a knowing participant in unregistered VASP activity. Criminal liability under the SFTIA carries penalties of up to five years imprisonment or KRW 50 million in fines.
An Additional Layer: Derivatives Exchanges
If the exchange you are referring users to offers crypto derivatives — futures, options, leveraged products — the legal analysis becomes significantly more serious. Korean courts have in certain circumstances characterized crypto derivatives trading as gambling activity. Under that characterization, facilitating access to such platforms can constitute aiding and abetting the establishment of a gambling venue, a distinct criminal offense under the Korean Criminal Act. A referral operator sending Korean users to a derivatives-heavy exchange should treat this as a separate and additional layer of legal exposure beyond the SFTIA analysis.
What We Found in Practice
Cha & Kwon has prepared legal opinions for domestic IT companies structuring referral arrangements with overseas virtual asset exchanges. In those engagements, we analyzed the exchange’s actual business conduct toward Korean users, the commission structure, and whether the referral activity constituted brokering or arranging under the SFTIA. The critical variable in each case was not the contract language — it was whether the overseas exchange was, in substance, using the Korean partner to build its Korean user base.
KoFIU’s position, as reflected in its public statements and regulatory practice: substance over form. Where intermediary activity amounts to facilitating virtual asset transactions as a business, registration obligations may apply regardless of how the arrangement is labeled.
Key Questions Before Signing a Referral Agreement
1. Is the overseas exchange targeting Korean users? Does it offer Korean-language services, a Korean customer support channel, or Korean won deposit methods? If yes, KoFIU registration obligations likely apply to the exchange — and its Korean partners face heightened risk.
2. Who controls the marketing? If the exchange provides promotional content, referral codes, or performance targets, the Korean partner is functioning as the exchange’s Korean sales operation — not as an independent introducer.
3. Is commission tied to trading volume? A commission structure tied to referred users’ actual trading activity (rather than a flat introduction fee) increases the inference that the referral operator is engaged in arranging virtual asset transactions as a business.
4. Does the exchange offer derivatives? If so, apply the gambling venue analysis in addition to the SFTIA analysis.
These are the factors Korean regulators and prosecutors would examine if a referral arrangement came under scrutiny.
Cha & Kwon Law Offices advises overseas exchanges, Korean platform operators, and institutional investors on structuring compliant referral and partnership arrangements under Korean law. For consultation, contact us at contact@chakwon.com or visit chakwon.com.
This article provides general legal information and does not constitute legal advice for your specific situation. Please consult qualified Korean legal counsel regarding your particular circumstances.
