Article 1(Purpose) #
The purpose of this Act is to regulate any fund-raising business conducted without permission in order to protect good traders and establish a sound financial order.
[This Article Wholly Amended on Feb. 4, 2010]
Article 2(Definition) #
"Fund-raising business without permission" under this Act means the business of raising funds from many and unspecified persons without obtaining authorization or permission under other laws and regulations, or without registration or reporting (including reporting pursuant to Article 7 of the Act on Reporting and Using Specified Financial Transaction Information), which includes virtual assets (referring to virtual assets as defined in Article 2 (1) of the Act on the Protection of Virtual Asset Users, etc.), and refers to any of the following acts: <Amended on Feb. 27, 2024>
1. The business of receiving any investment under an agreement to pay the whole of such investment or an amount exceeding such investment in the future;
2. The business of receiving money on the pretext of savings, installment savings, installments, deposits, etc. under an agreement to pay the whole of the principal thereof or an amount exceeding such principal in the future;
3. The business of issuing or selling debentures under an agreement to repurchase such debentures for no less than the price of such issuance or sale in the future; and
4. The business of receiving money on the pretext of membership fees, etc. under an agreement to compensate for any future economic loss with cash or securities.
[This Article Wholly Amended on Feb. 4, 2010]
Article 3(Prohibition on fund-raising business without permission) #
No person shall conduct any fund-raising business without permission.
[This Article Wholly Amended on Feb. 4, 2010]
Article 4(Prohibition on indication or advertisement of fund-raising business without permission) #
No person shall make any indication or advertisement (referring to any indication or advertisement under the Act on Fair Indication and Advertisement) on his or her business for unspecified individuals with a view to carrying on any fund-raising business without permission.
[This Article Wholly Amended on Feb. 4, 2010]
Article 5(Prohibition against use of trade name similar to financial business) #
No person shall use any name, as prescribed by Presidential Decree, recognizable as a financial business in his or her trade name for the purposes of performing any fund-raising business without permission.
[This Article Wholly Amended on Feb. 4, 2010]
Article 6(Penalty provisions) #
(1) Any person who conducts any fund-raising business without permission in violation of Article 3 shall be punished by imprisonment for not more than five years or by a fine not exceeding fifty million won.
(2) Any person who makes any indication or advertisement in violation of Article 4 shall be punished by imprisonment for not more than two years or by a fine not exceeding twenty million won.
[This Article Wholly Amended on Feb. 4, 2010]
Article 7(Joint penalty provisions) #
If a representative of a juristic person, or an agent, employee or other servant of a juristic person or individual commits a violation under Article 6 in connection with the business of the juristic person or individual, not only shall such violator be punished, but also the juristic person or individual shall be punished by a fine under the relevant provisions; provided, where such juristic person or individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such violation, this shall not apply.
[This Article Wholly Amended on Feb. 4, 2010]
Article 8(Administrative fines) #
(1) A person who uses any name recognizable as a financial business for the purposes of performing any fund-raising business without permission in violation of Article 5 shall be punished by a fine for negligence not exceeding 50 million won.
(2) A fine for negligence under paragraph (1) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree.
[This Article Added on Feb. 4, 2010]