[The Swamp of Bad Coins] Don't Wait for Withdrawal Delays, Take Legal Action... Possible to Place a Provisional Seizure on Company-Named Bank Accounts

[Report on 316 Victims of Fraudulent Coins - <2>] Reconstructing the Crime
① Possible to Freeze Company-Named Bank Accounts
② Most Recoveries Before Criminal Complaints Through 'Settlement'
③ Group Lawsuits Reduce Lawyer Retainers
④ Passage of Related Laws Urgently Needed Long-Term

[Asia Economy Reporters Byungseon Gong, Chaeun Gu] Experts say that if you have been scammed in cryptocurrency, the most important thing is to choose whether to file a civil lawsuit or a criminal complaint. Especially, at the stage of sending a certified letter before that, there is a possibility of recovering part of the frozen withdrawal amount through a 'settlement,' so it is necessary for victims to quickly recognize and respond to the problem together.

Go Hyeryeon, lead attorney at Law Firm Hye, said, "If it is a place with the company's name, a provisional seizure can be placed on the account under that name to recover part of the principal," adding, "If you first file a criminal complaint for fraud, the fraud perpetrators often negotiate to send part of the principal to avoid arrest and reach a settlement." Han Sangjun, attorney at Law Firm Daegeon, explained, "Usually, up to 70% of the principal amount can be recovered," and "To receive a discretionary reduction in sentencing, typically 70% of the principal must be repaid." However, if the fraudsters have no remaining funds, civil lawsuits are meaningless, and many cases proceed with criminal complaints. In most cases, companies continue operations and return the damages through 'settlements.'

They also advised that if signs of a tiered rating system, acquaintance recommendations, or similar deposit schemes appear, it is likely a 'multi-level marketing' scam, so victims should recognize it as fraud. Conditions such as 'principal guarantee' and 'high returns,' which are impossible from the start, should also be suspected. Once 'withdrawal prohibition' occurs, normalization is difficult, so prompt action is necessary. One attorney emphasized, "It should be recognized that it is hard to find cases where withdrawals blocked in cryptocurrency scams are resumed normally." Attorney Go added, "If you stay long in a fraudulent exchange and receive dividends at a certain level, it can be interpreted as recovering part of the principal," advising, "In such cases, it becomes difficult to apply fraud charges, so it is best to act as quickly as possible."

If filing a lawsuit, collective lawsuits provide faster relief than individual ones. One attorney said, "The larger the scale of damage and the more victims gather, the more public attention is drawn, so investigations proceed more quickly." According to the legal community, the usual lawyer's retainer fee for cryptocurrency scam victims is about 3.3% to 5.5% of the damage amount. For a damage amount of 100 million KRW, one must bear 3.3 to 5.5 million KRW. However, if scam victims unite and file a collective lawsuit, the retainer fee per person can drop to 0.5% to 3%.

In the long term, many opinions emphasize the need to protect investors through the institutionalization of cryptocurrency-related laws. Professor Kim Seungjoo of Korea University said, "There are many limitations in victim relief without laws related to cryptocurrency," adding, "Heavy penalties will be possible only after related laws are passed." The need for strong regulation is also raised. Professor Lee Byungwook of Seoul National University of Science and Technology said, "It is important to prevent crimes by regulating through a licensing system that prevents anyone from issuing cryptocurrencies arbitrarily."