Assistant Professor Woojung Jon presents a webinar on ‘Recent Legal Issues with respect to Digital Transformation in South Korea’

On 16 February 2023, Assistant Professor Woojung Jon from the Korea Advanced Institute of Science and Technology presented a webinar on ‘Recent Legal Issues with respect to Digital Transformation in South Korea’ over Zoom.  Professor Ernest Lim moderated this webinar.

The webinar focused on three issues of topical interest, namely digital assets, personal information protection, and the metaverse. With regard to digital assets, the speaker analysed the criminal precedents related to digital assets, digital asset exchange regulation, digital asset market regulation, and security token offerings. He stated that it was not clear whether the current capital market laws would apply to market manipulation and insider trading of digital assets. He then discussed the reporting requirements of digital asset exchanges under the Korean Act On Reporting And Using Specified Financial Transaction Information. In relation to digital asset market regulation, the central question was the application of the Capital Market Act to digital assets i.e., whether digital assets fell within the definition of ‘securities’ in the said act. With respect to fractional investments in the case of Musicow Inc, the Korean Securities and Futures Commission decided that a test similar to that of the US Howey test would apply in determining the classification of securities. As regards security token offerings, the key point made was that different forms or methods of issuance did not affect the nature of the security which was akin to a food and serving dish relationship. Further, security tokens issued overseas and those issued using Distributed Ledger Technology would also be subject to these laws. In summary, the Korean approach appeared to follow the US approach of expanding the scope of traditional securities laws to include digital assets in contrast to the European approach of creating new laws and regulations to regulate these digital assets.

On the issue of personal information protection, the speaker focused on the Korean Personal Information Protection Commission’s decision against Google and Meta which were found to have illegally collected and analysed the behavioural information of users for the purposes of customised advertisements. As a survey showed that the majority of Korean users set these platforms to allow third-party behavioural information collection, it could be said that the possibility and risk of infringement of the rights of the information subject was high. The Personal Information Protection Commission accordingly handed down the following sanctions: a major corrective order, penalty surcharge, and the public announcement of its decision.

In relation to the issue of trademark and copyright in the metaverse, the Supreme Court GOLFZON case decision and the effectiveness of the arbitration clause in the metaverse terms of use for trademark and copyright disputes were discussed. The GOLFZON judgement suggested that if a metaverse service operator were to create a visualization of a real-life building in their metaverse without any transformative elements, it could be considered copyright infringement. The speaker also analysed the possible effectiveness of the arbitration agreement between users through the metaverse terms of use. There were challenges in determining its effectiveness as it was unclear if the expression of intention by agreeing to the terms of use was sufficient to create legally binding obligations between users.