Cha & Kwon Law Offices provided legal advisory services to business operator A who plans to operate an NFT sales platform that also offers transaction service between users.

The client inquired about the legal nature of self-issued points that can be used within the NFT platform and whether there is a necessary registration procedure. Our firm reviewed and advised on several types of those with similar natures, such as electronic money, prepaid electronic payment means, and general points, that are governed by various laws.

Under the Electronic Financial Transactions Act, a person who conducts business such as issuing prepaid electronic payment means without registration can be imprisoned for up to 5 years or be charged with a fine of up to 30 million won (Article 49 Paragraph 4, Item 5 of the Electronic Financial Transactions Act).

Seeking legal advisory services from an expert who has an understanding of the business model and the industry can minimize risks for those operating a similar business. Consult with Cha & Kwon Law Offices for any relevant issues in preparation for a new business model.