A South Korean district court has ruled that the seizure of some 216 bitcoins by South Korean police as criminal proceeds as an inappropriate act.
In the first ruling of its kind in the country, the Suwon district court declared that ‘bitcoin is not subject to confiscation’ after authorities seized 216 bitcoins from an individual charged with operating an illegal pornography website.
According to a report by local publication Kyunghyang Shinmun, the case involved 33-year-old Ahn, who was indicted on charges of operating AVSNOOP.club, an illegal pornography website since December 2013. Ahn was arrested in May this year with the prosecution alleging Ahn to have made some $1.9 billion won in cash and 216 bitcoins. It remains unknown if Ahn accepted bitcoins from members as payment or if he exchanged some of the cash to bitcoin.
Regardless, the Suwon district court refused to accept the prosecution’s confiscation of the bitcoin, which saw Ahn’s cryptocurrency end up at the Treasury.
The court reportedly ruled:
It is not appropriate to confiscate bitcoins because they are in the form of electronic files without physical entities, unlike cash. Virtual currency cannot assume an objective standard value.
Further, the court explained that cases wherein virtual currencies are gained as criminal profit, any confiscation should only be considered by calculating the corresponding amount of the criminal proceeds, rather than confiscating the virtual currency altogether.
Details remain scarce, but the ruling could potentially set a groundbreaking precedent in relation to seizures of individuals’ cryptocurrencies by authorities, whatever the reason.
One of the world’s busiest trading markets for bitcoin, South Korea could soon see regulations enforced by authorities on the local bitcoin industry. As reported by CCN in June, Park Yong-jin, a lawmaker and member of the country’s ruling party drew up a new set of bills to regulate and legalize digital currencies in South Korea. The country’s financial regulator, the Financial Services Commission, established a digital currency ‘task force’ in November 2016 with the intent to focus on drafting regulatory and licensing parameters for bitcoin exchanges in the country. The task force convenes on a regular basis and continues to dwell on determining a legalized future for digital currencies in South Korea.
One of the more FinTech-forward nations, South Korea has predominantly harbored a bitcoin-friendly stance and recently issued permits to a number of bitcoin-mediated money transfer firms to engage in foreign currency transfer services.
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