SOUTH KOREA Law and Practice Contributed by: Jongbaek Park, Seungil Hong, Seyeong Im and Eric Jeong, Bae, Kim & Lee LLC
payments, on-chain finance and the digital asset eco - system, privately non-bank USD-based issued stable - coins are already functioning as de facto standards. From this perspective, overly restrictive limits on issu - ers could unnecessarily constrain the growth potential of the domestic industry. It has also been suggested that, subject to robust reserve asset requirements, strict disclosure and supervisory oversight, and clear redemption obligations, issuance could be permitted for non-bank financial institutions or fintech compa - nies that satisfy prescribed criteria. As noted above, the legislative bills currently pending provide for a licensing regime under which stablecoin issuers must meet a minimum capital requirement. Accordingly, it will be necessary to continue closely monitoring how the legislative framework for stable - coins ultimately takes shape. Open banking is currently operated in line with the rules of the Korea Financial Telecommunications and Clearings Institute (the “KFTC”). Fintech service providers that have executed an agreement for the use of open banking with the KFTC and financial institutions participating in open banking (“Institutions Using Open Banking”) may in general expeditiously and easily launch various fintech ser - vices by utilising open application programming inter - faces and testbeds to integrate new IT technology into existing financial services. However: 11. Open Banking 11.1 Regulation of Open Banking • “withdrawal agency services” in which Institutions Using Open Banking make withdrawals acting as agent, or resell the right to withdraw thereto, with a user’s consent to withdrawal obtained through a third party; and • “payment services” in which Institutions Using Open Banking collect a certain amount on a regular and repeated basis in return for the goods or ser - vices that they provide to a user,
are excluded from using open banking. Any company likely to engage in an act that may dis - turb the financial order or cause harm to consumers may also not be permitted to use open banking. 11.2 Concerns Raised by Open Banking Institutions Using Open Banking should manage the personal information of users or recipients obtained in connection with the open banking business in a way that prevents any unauthorised disclosure and, unless the subject of the information provides consent, may not use the information for any other purposes than the intended business purposes. If an incident happens because this privacy require - ment is violated, the Institution Using Open Banking should indemnify the relevant user or third party for any damages incurred by it in the absence of any spe - cial circumstances to be considered. In this respect, Institutions Using Open Banking must thoroughly prepare to prevent any breach of personal information by putting procedures in place for the pro - tection of personal credit information as required by the relevant laws, including the PIPA and the CIUPA.
12. Fraud 12.1 Elements of Fraud
Fraud is primarily regulated under the Criminal Act as a criminal offence. The elements of fraud are generally categorised as follows:
• fraudulent conduct; • causing a mistake; • a dispossession act;
• a causal relationship between the fraudulent conduct and the mistake as well as between the
mistake and the dispossession act; • acquisition of property benefit; and • occurrence of property damage.
In addition, specific types of fraud are regulated under specialised laws. For example, the Specialised Credit Finance Business Act regulates the act of forg - ing or altering credit cards or using or selling forged
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