[2017-09-09] Korean Court Rules Bitcoin Cannot Be Confiscated

[nickbelski]

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.

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.

https://news.bitcoin.com/korean-court-rules-bitcoin-cannot-confiscated/

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[Iranus]

As good as it is for net neutrality and people's freedom to use Bitcoin, doesn't look like it's a good thing for BTC's public perception or governments' perception.

They're implying that BTC's value is difficult to measure simply because it's a virtual asset, which is entirely untrue.  In reality, it's value is just as easy to monitor as a physical asset, if not easier considering that it's easier to move and easier for the price to be arbitrage traded between exchanges.

It could suggest the government's general misunderstanding of how cryptocurrency works, which is terrible considering the high trading volume in South Korea lately.

[FrueGreads]

I think this event was quite sad as it encourages criminals to use BTC in South Korea, since it seems they can get away with it. Bitcoins have their prices in exchanges, so I don't think it should be that hard to calculate their value, if they are viewed as assets. It definitely shows the need for regulations on bitcoins, so that things like this can't happen again.

[TravelMug]

I think this event was quite sad as it encourages criminals to use BTC in South Korea, since it seems they can get away with it. Bitcoins have their prices in exchanges, so I don't think it should be that hard to calculate their value, if they are viewed as assets. It definitely shows the need for regulations on bitcoins, so that things like this can't happen again.

I totally agree with you. Such decision will set a precedence in South Korea, and we may see a lot of scams and fraudster when caught, pointing to this court's ruling. I initially thought that since South Korea is very active in bitcoin market there's some sort of regulations that have been already put to at least minimize the risk. I was wrong. They better be establishing regulations this early otherwise criminals will take advantage of this ruling.

[BitFinnese]

I think the ruling of judge is correct since there is really no regulatory measure on how to deal with virtual currency.  There had been no approved rules on South Korea so I guess the decision of the court encourage illegal activities to based in South Korea until the country standardized their regulation for Bitcoin which is kinda sad.  Anyway, I hope South Korea does not see Bitcoin as tool for illegal activities and see it the way Japan see Bitcoin.

[CryptoBry]

This decision of the court is good news for the respondent and it is also reflecting the reality that as of now there is still no law covering Bitcoin and cryptocurrency so seizing something that is not yet in existence as far as the Korean laws is concerned will never be allowed. There is a wisdom in the handing down this decision and the court did not go beyond what can be in the existing laws.

[FrueGreads]

This decision of the court is good news for the respondent and it is also reflecting the reality that as of now there is still no law covering Bitcoin and cryptocurrency so seizing something that is not yet in existence as far as the Korean laws is concerned will never be allowed. There is a wisdom in the handing down this decision and the court did not go beyond what can be in the existing laws.

I understand that, but there is the down side. Due to this lack of regulation about BTC, it can be exploited by criminals. South Korea is quite active in the crypto world, they use BTC, and are very excited about Ethererum as well. So virtual currency is not new to them, so they really need to act fast and create a law that regulates BTC and other coins, and at least defines them as assets, property, or virtual currency or something like that, that enables them to be confiscated if needed.

[Eric Cartman]

I hope this spreads to all the free(?) world very soon.