Attorney Jeonghwan JK Kim of Architect Legal Advisory was recently featured in an in-depth interview for an article on South Korea’s ongoing effort to finalize a comprehensive regulatory framework for won-backed stablecoins and the jurisdictional discussion between the Financial Services Commission (FSC) and the Bank of Korea (BOK). As Korea positions itself to establish clearer rules for digital assets and competing interests between regulators, Mr. Kim provided expert commentary on the evolving policy environment and implications for market participants. Architect Legal Advisory continues to leverage deep regulatory expertise to support clients navigating Korea’s dynamic digital asset regime. Key Highlights from the ArticleStablecoin Regulatory Framework Nearing Completion: South Korea’s Financial Services Commission is advancing legislation to govern KRW-pegged stablecoins, aiming to consolidate multiple proposals into a comprehensive bill covering licensing, reserve requirements, and risk management, with an expected submission by late 2025.Jurisdictional Debate Between FSC and Bank of Korea: A central tension in regulatory design is the extent of regulatory authority and issuance control, with the BOK advocating for a larger role for banks — including proposals for bank majority ownership in issuer consortia — and the FSC emphasizing innovation-friendly oversight within the virtual asset market.Industry and Policy Dynamics: While regulators negotiate jurisdiction and structural models, private sector initiatives such as pilot stablecoins and industry alliances are progressing, underscoring the urgency for legal clarity.Read the full article here: Cryptopolitan – “South Korea races to finalize stablecoin rules amid regulator turf battle”Jeonghwan JK KimPartner | Korean Attorney-at-Law

Attorney Jeonghwan JK Kim of Architect Legal Advisory has been appointed as legal counsel to Shinhan Asset Trust Co., Ltd., effective December 15, 2025. Through this appointment, Architect Legal Advisory will continue to provide strategic, practical, and highest-quality legal advisory services in the areas of finance, real estate trust, regulatory compliance, and related corporate matters.Jeonghwan JK KimPartner | Korean Attorney-at-Law 

1. Registration Obligations and ExemptionsUnder Korea’s Electronic Financial Transactions Act (EFTA), any entity issuing or managing prepaid electronic payment instruments is, as a rule, required to register with the Financial Services Commission (FSC). However, the law provides for several exemptions to ease compliance for smaller or low-risk programs.Registration is not required in the following cases:Single-Merchant Instruments: Where the instrument is usable only at a single merchant operated by the same business owner.Small-Scale Issuance: Where the outstanding balance is below KRW 3 billion and the total annual issuance is below KRW 50 billion.Non-Cash, Reward-Type Instruments with Guarantee: Where the instrument is provided without direct payment from the user (e.g., loyalty points, promotional rewards), provided the issuer secures repayment responsibility through a guarantee insurance policy or similar safeguard.In practice, this means that registration is primarily required for instruments involving direct cash top-ups from users, or for programs that exceed the financial thresholds. Loyalty and promotional schemes can often rely on the insurance-based exemption.2. Obligations for Prepaid Balances (“선불충전금”)If a registered issuer accepts direct cash prepayments from users, the balance qualifies as “prepaid balances” (선불충전금) under the EFTA.Definition: The remaining amount of money paid by users for prepaid electronic payment instruments, after deducting amounts already used for payments, transfers, or refunds.In such cases, issuers are subject to a reserve management obligation. Specifically, at least 50% of the outstanding prepaid balance must be separately managed through designated financial institutions (e.g., banks or other qualified entities). Acceptable methods include trusts, payment guarantees, or repayment guarantee insurance, as prescribed by the Presidential Decree.This requirement ensures that users’ prepaid funds are adequately protected in the event of business failure or operational disruption.3. Legal ImplicationsThe revised framework draws a clear line:Registration is mandatory unless a program fits into one of the statutory exemptions.Even where registration is exempted, consumer-protection obligations may still apply depending on the structure.For issuers that actually receive cash prepayments, the separate reserve management rule for prepaid balances introduces a financial safeguard that must be embedded into operations.Businesses operating reward points, coupons, or stored-value wallets should carefully assess whether their instruments fall within the definition of prepaid electronic payment instruments, determine if an exemption applies, and, if handling user-funded balances, establish robust systems to comply with the separate reserve requirement.Architect Legal Advisory has significant experience advising on the EFTA, fintech compliance, and consumer-protection frameworks in Korea. We are confident to provide tailored guidance on registration requirements, exemption strategies, and compliance implementation for your business.Jeonghwan JK KimPartner | Korean Attorney-at-Law 

Foreign investors often seek to use Convertible Notes (CNs) or Simple Agreements for Future Equity (SAFEs) when investing in Korean startups. However, unlike in the U.S. or other jurisdictions, these instruments are not yet common in Korea and raise unique legal and regulatory questions, particularly during FDI (Foreign Direct Investment) filings.CNs vs. CBs under Korean LawWhile CNs may resemble Convertible Bonds (CBs), the two are distinct. CBs are statutory securities under the Korean Commercial Act, requiring strict issuance procedures, registration, and corporate filings. By contrast, CNs are not recognized as securities in Korea, and thus lack automatic convertibility. Instead, conversion into shares requires the standard procedures for new share issuance, including board resolutions and registration.This distinction means that provisions such as “automatic conversion” commonly found in U.S. CN agreements may be unenforceable in Korea. The Korean Supreme Court has held that conversion rights outside statutory procedures could be invalid, emphasizing the need for formal resolutions and filings at each conversion event.SAFE and Conditional Equity ContractsKorea introduced similar—but not identical—structures under the Venture Investment Act:Conditional Equity Acquisition Agreements (2020): modeled after SAFEs, without maturity or interest.Conditional Equity Conversion Agreements (2023): allowing maturity and interest, with conversion into CBs rather than shares.Despite these developments, U.S.-style CNs with both maturity and interest or SAFEs do not fall neatly under these categories.FDI and Practical TreatmentIn practice, CNs are typically reported to banks as “loan agreements with equity conversion rights” rather than CB issuances. Each case is reviewed individually, based on terms such as maturity, interest, and repayment. SAFE-like structures are also recognized but remain relatively unfamiliar in the Korean regulatory environment.Practical Implications for InvestorsForeign investors should note three key differences when structuring CN/SAFE investments in Korea:No statutory security status – CNs and SAFEs should not be recognized as CBs under Korean law.No automatic conversion – every conversion requires corporate resolutions and filings.Regulatory uncertainty – banks and regulators may classify CNs differently depending on contract terms.Given these complexities, foreign investors are strongly advised to seek local legal counsel to ensure that CNs or SAFEs are properly structured, enforceable, and compliant with Korean law.Hence, we strongly advise investors to exercise caution when adopting CNs or SAFEs in Korea and to seek professional guidance tailored to their specific transaction. Architect Legal Advisory is well experienced to assist with structuring, compliance, and FDI filings in CN/SAFE investment. Please feel free to contact us for further advice.Jeonghwan JK KimPartner | Korean Attorney-at-Law

Attorney Jeonghwan Kim of Architect Legal Advisory was recently featured in Law Times as a legal expert on Korea’s proposed stablecoin legislation. In the article, he observed that while USD-based stablecoins such as USDT are widely adopted due to their peg to the U.S. dollar and relatively lighter regulation, a won-denominated stablecoin faces limited utility and is likely to encounter strong government-led regulation, making market adoption more difficult.Read the full article here: Law Times – “Korea Risks Missing the Golden Time for Stablecoin Legislation”Jeonghwan JK KimPartner | Korean Attorney-at-Law

In a recent Yonhap Infomax “Legal Insight” column, Attorney Jeonghwan Kim explored whether Korean companies may issue equity-based warrants similar to Restricted Stock Units (RSUs). He explained that while Korean law generally prohibits companies from issuing options based on their own shares—except in the case of stock options and bonds with warrants (BWs)—the growing adoption of RSUs by global IT companies is prompting renewed discussion on whether equity-based warrants should be permitted as a capital-raising tool in Korea.Read the full article here: Yonhap Infomax – “Can Companies Issue Equity-Based Warrants Like RSUs?”Jeonghwan JK KimPartner | Korean Attorney-at-Law

Asia Business Law Journal recently covered the launch of Architect Legal Advisory, a boutique law firm in Seoul founded by Jeonghwan JK Kim and Juno Cho, both formerly with HMP Law. The article highlights the firm’s focus on foreign direct investment, corporate establishment, startup advisory, and regulatory compliance for foreign clients entering the Korean market.Read the full article here: Asia Business Law Journal – “Korean boutique Architect launches, eyeing foreign clients”

Juno Cho of Architect Legal Advisory was featured in a Yonhap Infomax “Legal Insight” column discussing the evolving relationship between Korea’s game regulations and the rise of the metaverse. Drawing on the Apple–Epic Games dispute and the reclassification of Roblox as a “metaverse” rather than a “game,” the article examined how definitions can determine whether platforms fall under Korea’s stringent game regulatory framework.Cho highlighted that Korea’s game rating system, unlike those in the U.S. or Japan, places heavy emphasis on control rather than consumer information, giving regulators broad authority to block or cancel game services. He further noted that the expansive interpretation of “gambling” risks—especially where in-game assets, NFTs, or digital currencies can be traded—poses significant challenges for metaverse platforms operating in Korea. Ultimately, he emphasized the need to reassess whether current laws and practices remain effective in light of global developments in gaming and digital ecosystems.Read the full article here: Yonhap Infomax – “Game Regulation Through the Lens of the Metaverse”Juno ChoPartner | Attorney-at-Law