In a virtual asset project, if the whitepaper's contents differ from actual operations, can it be subject to punishment?

In a virtual asset project, where the contents of the whitepaper differ from the actual manner of operation, it may lead to criminal punishment such as fraud, depending on the manner of explanation during the process of attracting investment.

Although a whitepaper is not a legally mandated disclosure document, it is used as the most decisive indicator by which investors decide on their investment.

If funds were raised while the contents stated in the whitepaper were false or important facts were intentionally omitted, this constitutes a clear act of deception.

In this case, it constitutes the crime of fraud under the Criminal Act, and imprisonment for up to 20 years or a fine of up to 50 million won may be imposed, and where the amount defrauded is large, aggravated punishment may even be applied, so caution is required.

Under the recently enacted Act on the Protection of Virtual Asset Users, where unfair trading practices such as price manipulation inconsistent with the whitepaper or the use of undisclosed information are combined, a penalty surcharge amounting to twice the unjust gain may be imposed separately from criminal punishment.

Even where it is difficult to calculate the amount of gain, a penalty surcharge of up to 4 billion won may arise, so the legal risk is very large.

Of course, changes to plans or delays in technology development can occur, but if the information at the time of attracting investment was truthful, punishment is often difficult on the basis of failing to meet the target alone.

Ultimately, the measure of legal judgment depends on whether the information at the time of investment was false, or whether there was an intent to deceive others.

In the end, the difference between a virtual asset whitepaper and its actual operations requires a careful examination of its cause, and it is above all important for virtual asset operators to secure legal truthfulness from the planning stage.