Operating an Unregistered Lending Platform, Facing Prison Time
How We Secured a Suspended Sentence in a Case Involving 141 Victims

Hello, we are Kwon & Partners Law Firm, a reliable partner for clients facing unjust illegal private-lending cases. Even when small loans are made remotely through an online platform, repeatedly operating a lending business without registering with the competent authority can be punished as an unregistered lending business. In particular, when interest is deducted in advance, the actual interest rate can be calculated as extremely high, and cases with many victims can make an actual prison sentence highly likely. Today we introduce a case in which, despite an actual prison sentence being highly likely for an unregistered lending business, we secured a suspended prison sentence through victim identification, transaction-by-transaction profit analysis, and criminal deposit (a formal deposit made for victims).

Our 25-year-old client repeatedly made small loans nationwide through a loan brokerage platform. Without registering with the competent authority, the client made approximately KRW 493.72 million in loans over 798 transactions, and received approximately KRW 390.10 million in interest exceeding an annual rate of 20% from 146 people. The prosecution regarded approximately KRW 351.60 million as criminal proceeds and requested a preservation of forfeiture, which the court granted, freezing the client's real estate and bank deposits.

Rather than disputing the "business nature" of the 798 lending transactions themselves, we judged that the key issue was how to demonstrate the actual size of the profit that remained and the efforts made toward restitution for the victims. In particular, we organized transaction-by-transaction data to show that the full interest amount recorded in the ledger was not the same as the actual profit, and explained to the court, distinguishing the principal that had not been recovered.

First, we confirmed that all of the offending conduct had ended before the amended law took effect on July 22, 2025, and organized the applicable provisions and the range of the statutory sentence based on the law in effect at the time of the conduct. We then divided the list of offenses in the indictment by individual transaction and calculated the amount of unrecovered principal and the actual profit. In addition, when the prosecution refused to allow inspection and copying, we used the court's own procedure for inspecting and copying trial records to identify the victims one by one. We reached settlements with victims we were able to contact, and for the 141 victims we could not reach, we specified them as recipients and made a criminal deposit of KRW 100 million.