The Financial Supervisory Service (hereinafter “FSS”) requested to prosecution for investigation on fintech businesses. Cha&Kwon Law Offices deputized businesses subject to investigation, clarified the injustice of the investigation process and succeeded in eliciting non-transfer decision.

LLC (Limited Liability Company) A is a start-up company with the purpose of developing and providing software application. LLC A expected that specialized SNS services for stock investors and provided application B which was made during the engineering process to the application market.

The FSS who discovered LLC A developed and distributed application B made a judgement that LLC A led an own credit information management business without permission and reported LLC A to prosecution for violating the Credit Information Use and Protection Act.

Application B contains a function that collects users’ credit information, which is similar to how own credit information management businesses operate. Upon being informed from the investigation agency about the report, LLC A sought legal advice from Cha&Kwon Law Offices, office equipped with diverse work experience related to financial businesses.

Through consultations, Cha&Kwon Law Offices confirmed the fact that LLC A developed and distributed application B and that the application had crawling on the users’ credit information. Cha&Kwon Law Offices advised that it would be difficult to deny these facts. Hence, Cha&Kwon Law Offices (1) vindicated the investigation requesting / judgement process of investigation agencies and also vindicated that while the investigation agency will process rational investigation reports for general cases, wrongful investigation reports may also happen for some cases. Simultaneously, based on the developing purpose and circumstances, the number of users, functions of the app, situation and human resources of the company, Cha&Kwon Law Offices emphasized that difference lies between the client’s tasks and general tasks of usual own credit information management businesses.

This induced the sympathy from investigation agency and its conclusion that “it cannot be seen that LLC A operated an own credit information management business.” As a result, the investigation agency examined arguments provided by Cha&Kwon Law Offices and decided non-transfer on LLC A’s charge for violating own credit information managements business.  

In the case of accusations from relevant agencies, investigating agencies trust the authority of relevant agencies and tend to believe the criminal charges raised against the suspect. However, if the following are fully explained, (1) administrative customs, (2) while most of such task systems are operated very rationally, investigation reports for some cases may be operated unfairly, (3) this case was one that fell under case (2), and that (4) the difference between investigation reports and the actual task, unjust investigation reports could be fully defended.

Considerable expertise is required to have manage such cases. Based on our diverse expertise on finance area, Cha&Kwon Law Offices analyzed this case from viewpoints different from relevant agencies and succeeded in proving the innocence of our client. Utilizing our thorough research and various experiences, Cha&Kwon Law Offices provide our clients legal advice to protect our clients from receiving unreasonable measures.