As the workings of cryptocurrencies are getting better understood by the larger populace, governments globally are yet to fully grasp the concept and give clear directions on where they stand with new digital currencies. And although a lot of countries claim that digital coins like bitcoin are not real currency, some states are looking for ways to confiscate it. This has caused a court in South Korea to declare any moves by the authorities to confiscate these digital currencies as illegal. This news has been received with much excitement in the cryptocurrency community.
It is particularly important to take interest in the Bitcoin situation in South Korea. It is known that the country is host to a couple of exchanges that have some impressive trade volumes – cryptocurrency exchanges like Bithumb, Coinone and Korbit are known to have relatively high trading numbers. It is however speculated that some criminal minds are flocking the cryptocurrency space albeit that the larger percentage of Korean bitcoin users only apply it for legitimate activities.
Reports are that local police recently seized as much as 216 bitcoins from an individual. It is suspected that this person is engaged in some sort of criminal activity. But according to a local court, the action of the police is illegal. The Suwon District Court ruled that Bitcoin is not subject to confiscation. It is believed that this ruling is groundbreaking and can send ripples round the world mostly because law largely relies on precedent and this ruling is a great one for crypto-holders.
The arrested person in this case was leveled with the charge of running an illegal pornography service. Although the number of recorded users for the pornographic site is large, the owner never recorded much in terms of membership fees collected. It is also unclear in which currency forms the fees were paid. The police are unsure if fees were taken in bitcoin or converted to money subsequently.
Even though the charge of running an illegal pornographic service site against this individual was not dismissed, the confiscation of his bitcoin assets has been determined by the court to be illegal – it is evidently “not appropriate to confiscate Bitcoins as they cannot assume an objective standard value.” This is a rather definite statement by the Suwon District Court. The statement does not particularly intend that bitcoin has no value, but it can be represented as bitcoin being electronic money has no physical representation.
This implies that even if bitcoin is to be seized as earnings by criminals, it will be pretty difficult to calculate the exact value of the seized asset since bitcoin has no fixed value. The challenge now however is; will bitcoin and other digital currencies ever be legally recognized in South Korea?