However, no misunderstanding or prejudice can withstand the truth and essence. In the midst of a dark night, a candlelight may seem to be the brightest thing in the world, but it cannot be brighter than the sun.

As a legal advisor for WANNABE GROUP, I am so sad to see the current misunderstandings and prejudices about the Company as I know better than anyone else the truth and essence of WANNABE GROUP.

The article I am about to present aims to provide a detailed explanation of what WANNABE GROUP is, its operational status, and to clarify whether there are any legal issues under the current law that multiple parties are concerned about.

WANNABE GROUP consists of WANNABE DATA Co., Ltd. as its parent company and several subsidiaries under it. Additionally, the group operates a non-profit foundation called Kangaroo Foundation, which aims to help youth in crisis and underprivileged neighbors. The group does not engage in any tax evasion or illegal activities. 

Looking specifically at the major companies that make up the WANNABE GROUP, they are as follows.

This company is the holding company of the WANNABE GROUP, primarily engaged in the database and online information provision business. Currently, the Company operates the in-house developed “EVENTO” platform, which has been officially recognized by Google Play Store.

This company received technology transfer of the distributed consensus technology ‘BADA’ from the Electronics and Telecommunication Research Institute (ETRI) and is working to further commercialize and develop this technology for a better future.

This company is a Blockchain Main-net developer that aims to provide computer system integration consulting and construction services, such as software development and supply etc. They perform development services for government agencies, local governments, and large corporations.

This company was founded by Professor Kim Yoon-bae, who graduated from the Department of Veterinary Medicine at Seoul National University and is currently a professor in the Department of Veterinary Medicine at Chungbuk National University. The Company is developing stem cell-based therapies for intractable diseases. The Company has developed a technology called ‘exosome’ and has received several patents related to this technology. If the Company passes clinical trials in the future, it will provide a revolutionary foundation for treating incurable diseases, as well as have astronomical asset value.

This company is engaged in the development, manufacturing, and distribution of cosmetics, including those that contain effective ingredients from exosome and white roses developed by Designed Cells Co., Ltd.

The above company is a specialized Blockchain technology developer that WANNABE GROUP recently invested in. Since 2014, the Company has been developing the Blockchain technology, and recently obtained a license for the Blockchain distributed ledger technology from DMCC, Dubai, a government agency in the United AE. As a result, the Company established a local subsidiary in Dubai called “WIZBLE DMCC”, which will serve as the R&D center for the Blockchain technology and provide technical support and training for local companies. 

⓻ In addition to the companies mentioned above, there are several companies that make up the WANNABE GROUP, which operates an online shopping mall, WANNABE Oncheon Land, which owns a hot spring glamping swimming pool, and WANNABE Media Co., Ltd., an event planning company. These companies can be said to be excellent enough to be significantly profitable and successful in the future.​

Each company of WANNABE GROUP is relatively young and mostly preparing for growth, so their visible sales and operating income are still minimal. Therefore, the main source of revenue for the group can be said that it is from the sale of advertising vouchers through EVENTO, a platform developed independently by WANNABE DATA Co., Ltd., which is registered in the Google Play Store.

However, if the strong performance of each of the outstanding companies mentioned earlier become visible, it is expected that they group’s overall sales and operating income will sharply increase in the near future.

As previously mentioned, the main source of revenue for the Company is from the sale of advertising vouchers on the EVENTO platform. These vouchers selling by the head office are considered to be credible products, and the starting point of a platform created by an IT company is recognized as the point at which it is officially registered on the Google Play Store. The head office’s EVENTO platform was officially registered for users aged 12 and older on the Google Play Store in November 2021, and currently has a high rating of 4.6 out of 5 points and more than 32,000 members, making it a credible platform.

These advertising vouchers are sold for KRW 550 thousand each, including value-added tax, and purchasers of these vouchers are provided with an NFT that can be considered as a kind of warranty using the Blockchain technology.

At the same time, purchasers of these advertising vouchers are granted the status of sales business operators who can sell these vouchers on behalf of the Company. With this status, they can receive a share of the Company’s revenue at a certain percentage (40%) divided equally among all sales operators, which corresponds to N/1, where N is the total number of sales operators.

Therefore, with the status as a sales agent of advertising vouchers after purchasing them, they can not only receive a share of the Company’s profits, but also earn sales commissions through their sales activities.

If the Company grows and its sales and operating income improve further in the future, the sales agents will receive a larger share of the profits distributed by the Company.

Currently, those who criticize the WANNABE GROUP are raising questions about whether the purchase of advertising vouchers and the issuance of NFTs for them are a multi-level financial scam to get loans or a phone fraud through multi-level investment. In particular, they argue that this constitutes a similar fraudulent act under current laws.

However, such claims are completely different from the essence of WANNABE GROUP’s business and merely one-sided claims without any factual basis. The current operating form of WANNABE GROUP can be said to be a normal business that does not violate any legal principles under current laws and regulations. 

According to the current “Act on Regulation of Similar Receiving Act” and related precedents, the following elements must be satisfied for an act to be considered a similar receiving service. If even one of these elements is not met, the act cannot be considered as a similar receiving service. 

In conclusion, in case of the head office, none of the requirements examined earlier are met, so it cannot be considered an act of a similar receiving service.

First of all, the transaction format of the head office is essentially a business based on product transactions, and it is never collecting investment funds without actual product transactions.

In other words, the Company’s transaction format involves the sale of intangible content, which is the sale of advertising vouchers. They use an application called “EVENTO,” which was developed by WANNABE DATA Co., Ltd. and is registered on the Google Play Store to trade advertising vouchers. Therefore, they issue NFTs through the Blockchain technology to prove ownership of intangible content, advertising vouchers. 

According to the court precedents, “the legislative purpose of prohibiting similar receiving activities is to regulate the raising of funds in the name of investment or deposit etc. from an unspecified number of people without obtaining authorization or permits under relevant laws in order to protect honest traders and secure sound financial order.” And “given this legislative purpose of regulating these similar receiving activities and the definition of ‘investment funds’, it is difficult to regard as receiving funds without permission any act of receiving funds in practice in connection with the trade of products,” and therefore, if the product is actually traded, it cannot be considered a violation of the Act on Similar Receiving Activities.

However, if a transaction appears to be a product trade but is actually a monetary transaction disguised as a product trade or under the mask of it, it can be considered a similar receiving activity prohibited by the Act on Regulation of Similar Receiving Activities, even if it has the appearance of a product trade. However, the Company’s transaction act is essentially a product trade for intangible content, namely the sale of advertising vouchers. In practice, the value-added tax is imposed accordingly, and they pay the value-added tax on all advertising voucher transactions without any single exception. 

Therefore, the Company’s transactions cannot be considered as a financial transaction disguised or disguised as such without any actual product transaction taking place and it can be said to be essentially a product transaction, so it cannot belong to similar receiving activities. (Refer to Supreme Court decision on Oct 11, 2007, Case No. 2007 Do 6012, Seoul High Court decision on Jun 21, 2007, Case No. 2007 No 687.)

Another condition for similar receiving activities is that there must be an act of promising to pay the principal or an amount exceeding it to lure investors. 

However, in the case of the head office’s transaction, after purchasing advertising vouchers and obtaining the qualification as a sales business operator, the Company can receive a profit in proportion to the fraction of Nth of the total sales business operators, which is calculated by dividing 40% of the total operating income earned by WANNABE DATA Co., Ltd. This profit cannot be considered as a guaranteed return of principal, as it is a payment of Nth of the total operating income of WANNABE DATA as a rate of 40%, and the distribution of profits can always fluctuate depending on the Company’s sales or operating income, so it is difficult to see that the requirements for similar receiving activities are met.

Therefore, the Company’s marketing is basically based on product transactions, as noted above, so does not basically fall under any similar receiving activities. Besides, profits are distributed to business operators, not NFT holders, and furthermore, only in cases where profits are generated, they are distributed in proportion to the fraction of Nth, making it entirely different from the guarantee of the principal so it can be said that it does not correspond to similar receiving activities regulated by the current law on regulations of similar receiving activities.

Generally, when we refer to “financial pyramid” or “illegal multi-level marketing,” it means a violation of Article 24, Paragraph 1, Clause 12 of the Door-to-Door Sales Act, which prohibits conducting monetary transactions without transactions of goods or services, or conducting disguised monetary transactions through an organization composed of multi-level salespeople or people joined by step similarly.

According to Article 24, Paragraph 1 of the Door-to-Door Sales Act (Prohibition of Deceptive Sales Practices), anyone who engage in the following acts shall be punished: conducting monetary transactions without engaging in transactions of goods or services by using a multi-level sales organization composed of individuals who have joined by step, or engaging in disguised transactions of goods or services but essentially conducting only monetary transactions by selling goods or services to salespeople at a significantly higher price like 10 times higher than the acquisition cost or market price and paying sponsorship fees, or after signing the sales contract with the salesperson, paying the sponsorship benefit without supplying goods or services for no justifiable reason corresponding to the contract or conducting acts that are essentially monetary transactions based on the nature of the transaction, such as the salesperson’s supply capacity for goods or services, supply performance for consumers, supply or sales contracts for goods or services between the salesperson and consumers, conditions for payment of the sponsorship benefits, etc. 

However, in case of the advertising vouchers of the head office, there are no other sponsorship benefits paid from the Company except for the sales commission based on the sales performance of the salesperson, and furthermore, as the actual transaction is the sale of advertising vouchers and can’t be considered a monetary transaction, so it is difficult to regard it as a violation of the above law.

In conclusion, what makes multi-level marketing illegal is the proportional benefits received by a person at a higher level based on the performance of the person at a lower level. However, according to the Company’s sales system, the sales ranks are just divided into several levels based on performance, but there is no multi-level operating format where the sales of people at a lower level affect the sales of people.

Most illegal multi-level marketing companies are not supervised by financial authorities and they promise high returns through higher fixed interest rates or dividends than those offered by financial institutions, but in reality, they do not have any actual resources of income and are simply Ponzi schemes that use the investments of new members to pay off returns to existing members so they also use a multi-level marketing structure to recruit new members and guarantee profits under the guise of performance bonuses when recruiting members, which is a pyramid scheme. 

This Ponzi scheme is one of investment frauds named after Italian financial criminal “Charles Ponzi” and in essence, it is a “multi-level financial fraud”, so called by “pulling out the lower stone and placing it to support the higher stone” in which promised dividends (investment principal) are paid to the first-tier investors using the investment money of subsequent-tier investors without actually generating any profit, and as a result, it has an inherent limit that leads to an inevitable collapse unless the number of the lower tier members continuously increase, and if the fund raising system collapses out of nowhere, it’s not possible to avoid significant loss.

Even though it is advertised to an unspecified group of investors with a guarantee of capital preservation and high dividends, it is a lure to attract new investors as a fraudulent act, saying that they guarantee high returns in a short period of time, which can’t be guaranteed by normal legitimate investment practices, but It is simply a financial scheme that the profits are not earned through the organization’s business activities but are simply paid from the investors’ own investments or from the investments of subsequent investors. In case of this Ponzi scheme, if investment funds are not continually funneled in, the scheme will end up a collapse in the end.

In determining such fraudulent schemes, the precedent has specified that there is no deception element in the marketing plan because as long as the Company does not pay bonuses if no sales are made, and has no obligation to pay bonuses based on points to members until a certain deadline, and complies with marketing principles related to bonus payments, no matter how much the number of members increases, the Company always generates profits or incurs no losses so the marketing structure itself has permanence.” Therefore, unless the marketing structure itself compensates for the profits of earlier investors with the investment funds of later investors due to its unconditional guarantee of profits, there is no fraudulent scheme. (As in the decision of the Supreme Court on Oct 11, 2007, 2007 Do 6012).

Of course, they consider it to be a fraudulent element that falls under the category of intentional negligence if the Company explains its business differently from the content in their marketing plan or deviates from the principles of the marketing plan in conducting the business.

Based on these precedents, it can be said that the Company’s transaction type of the marketing plan does not guarantee unconditional profits or the principal within a certain period at all. Besides, as mentioned earlier, the companies that belong to WANNABE GROUP are solid ones that are likely to generate significant sales or business performance in the near future, so the Company’s source of revenue is not solely based on the investment of new investors to maintain the profits of existing investors.

Additionally, as the Company clearly explain and disclose these elements of its marketing plans to members during company presentations or sales of advertising vouchers or application for registration of business operators, it is difficult to say that any deceptive elements are involved. 

Therefore, since the Company’s business model does not involve any deceptive elements which are a requirement for fraud, it does not fall under the category of fraud under the Criminal Act and the Act on Aggravated Punishment of Specific Economic Crimes.

According to the Act on Reporting and Using Specified Financial Transaction Information (hereinafter referred to as the Specific Financial Information Act), those who engage in buying and selling of virtual assets as a business are required to report to the Financial Information Analysis Institute as virtual asset service provider (Article 2, Paragraph 1, Subparagraph ‘Ha’ and Article 7, Paragraph 1)

However, according to the manual for virtual asset business operator’s reporting by the Financial Information Analysis Institute/Financial Supervisory Service, the key elements of a virtual asset business operator based on FATF international standards are that they ⓵engage in business, ⓶on behalf of customers, and ⓷actively promote virtual asset-related activities. Activities such as self-directed virtual asset trading (P2P etc.), one-time transactions, and providing platforms without charging fees for services are excluded from this definition.

The Company issues and sells NFTs of advertising vouchers, and the official position of financial authorities is that NFTs are not generally considered virtual assets, but even if NFTs are virtual assets exceptionally, the Company does not engage in intermediary trading of NFTs for advertising vouchers between customers and simply sell advertising vouchers and issue NFTs for them so they have not engaged in trading activities for the benefit for customers legally, but for the Company’s own benefit so it does not fall under the category of virtual asset business operators whose reporting is required.

Therefore, it is difficult to say that selling advertising vouchers and issuing NFTs violate the Specific Financial Information Act.

The Capital Market Act has been established to rescind all previous laws related to financial transactions including the Securities Exchange Act and integrate them into a single law and aims at punishing disturbance of the capital market and promoting fairness and reliability in financial transactions.

According to the recent media reports, they are arguing that NFTs for advertising vouchers issued by the head office can be considered an investment contract security under Article 4, Paragraph 6 of the Capital Market Act, and thus may have the potential to violate the Capital Market Act. 

However, such claims stem from a misunderstanding of the nature of NFTs for advertising vouchers that have been issued by the head office as noted earlier. It is difficult to say that NFTs for advertising vouchers that have been issued by the head office are financial transactions, but they are merely transactions of goods. In other words, it’s because NFTs issued by the head office are simply to guarantee the advertising vouchers for those who purchased them and NFTs for advertising vouchers do not contain any rights of profits of One-Nth themselves.

The conceptual elements represented in the article (Article 4, Paragraph 6) of the definition of the concept of ‘investment contract securities’ on the Capital Market Act can be summarized as follows:

(ⅰ) A joint venture between an investor and a third party (including other investors),

     (ⅱ) Investing money etc., 

     (ⅲ) Receiving profits or losses primarily based on the results of the third party’s business activities, and

     (ⅳ) Representing contractual rights

As such, in order to become investment contract securities under the Capital Market Act, the contractual right to receive profits or losses primarily based on the results of a third party’s business activities must be contained in the security, but NFTs for advertising vouchers issued by the head office serve solely as a warranty to prove the rights of advertising vouchers, and the contractual right to get the profits as much as One-Nth as investors is not contained in there at all.

In other words, a person who purchases advertising vouchers of the head office and possesses NFTs can’t receive the Company’s profits with only NFTs, and only when they have the qualification as a business operator to sell advertising vouchers (expressed as a dealer in the head office), they are finally able to receive the Company’s profits after dividing the profits by One-Nth as many as the number of dealers.

Furthermore, in the initial stage, if people purchase advertising vouchers and apply for the qualification as a dealer, those applications were accepted with almost no exception, but the Company has ever revoked the dealer qualification of people deemed unqualified by the Company’s internal supervisory organization such as the ethics committee or the WANNABE audit office, which has been announced on the dealer application form as well.

Therefore, it can be said that qualification for a dealer is totally different from NFTs for advertising vouchers and as only a person who is qualified for a dealer can receive a share of the Company’s profits, the Company’s NFT for advertising vouchers cannot be considered the investment contract security regulated by the Capital Market Act and thus there is no possibility of violating the related law.

As seen above, WANNABE GROUP is a solid conglomerate with excellent companies that are suitable for the age of the 4th industrial revolution and is expected to achieve tremendous growth in the future. 

In addition, also in the currently operation form, they have undergone legal reviews by a law firm from the beginning and even now continue to receive legal advice from attorneys of the law firm so it can be confidently said that its operation form does not violate any currently laws and regulations at all.

Rather, the upright mindset of WANNABE GROUP’s chairman, Jeon Young-cheol and the Company’s management direction for the benefit of the socially vulnerable people are extremely exemplary and worthy of benchmarking by other companies. 

Finally, WANNABE GROUP is expected to complete the recruitment of business operators who receive a share of One-Nth from the Company in the near future and will not accept any additional business operators thereafter. Then, it is expected that any further criticism or malicious behaviors will subside.

Therefore, we sincerely appreciate the concerns and deep interest in WANNABE GROUP, but we earnestly hope that excessive prejudice or distorted views will now come to a halt.