A South Korean district court has ruled for the first time regarding the nature of digital currencies. In the case where 216 bitcoins were seized by the police as criminal proceeds, the court ruled that it is inappropriate to confiscate bitcoins.
Also read: South Korea to Dispose of 216 Bitcoins in First Public Auction
The Court’s Ruling
The Suwon District Court in South Korea ruled on Friday that “bitcoin is not subject to confiscation,” the Kyunghyang Shinmun reported. This is the first time a court has ruled in Korea on the nature of digital currency, the publication noted.
The case involves Ahn, 33, who was indicted on suspicion of operating an illegal pornography site, avsnoop.club, which had approximately 1.2 million members. He was arrested in May for pocketing an alleged illegal 1.9 billion won in membership fees. The Southern Gyeonggi Provincial Police Agency confiscated Ahn’s 216 bitcoins. It was the first time a domestic investigative agency seized digital currency as a criminal profit in Korea.
However, the court did not accept the prosecution’s confiscation of the bitcoins, the news outlet detailed, and quoted the court saying:
It is not appropriate to confiscate bitcoins because they are in the form of electronic files without physical entities, unlike cash…Virtual currency can not assume an objective standard value.
In addition, “it is difficult to calculate the value of the virtual currency even if it should be added. In some cases, even if virtual money is recognized as a criminal profit, it means that it should be calculated by calculating the corresponding amount instead of confiscation,” the publication conveyed the court’s explanation.
Bitcoin Not Yet Recognized in Korea
Korea currently has no bitcoin regulation. The government announced this week how it plans to deal with digital currencies including bitcoin and ether. In August, lawmaker Park Yong-jin introduced an amendment to the Electronic Financial Transaction Act that provides a regulatory framework for digital currencies. This bill has been referred to as the “Bitcoin Regulation Act“. It outlines requirements and prohibited activities of anyone and entities dealing with digital currencies.
While bitcoin is not legalized, its use as a method of foreign exchange transfer for small amounts is. In July, the amended South Korean Foreign Exchange Transactions Act went into effect which enables fintech companies in the country to obtain a permit allowing them to legally offer Bitcoin international transfer services for small sums.
What do you think of the court’s ruling that bitcoin is not subject to confiscation? Let us know in the comments section below.
Images courtesy of Shutterstock
Need to calculate your bitcoin holdings? Check our tools section.