There are many different opinions among government officials worldwide on what can and cannot be done with Bitcoin. Although most countries still claim Bitcoin is not a currency, some states are looking at ways to confiscate the cryptocurrency. However, that may not be the case much longer in South Korea, where a local court ruled that Bitcoin cannot be confiscated. It is a very interesting precedent, to say the least.
No More Confiscation of Bitcoin in South Korea
It is quite interesting to keep an eye on the Bitcoin situation in South Korea. As most people are well aware, South Korean exchanges are the main sources of trading volume for quite a few different major cryptocurrencies. Bithumb in particular is bringing in a lot of trading volume, although Coinone and Korbit should not be overlooked either. Despite growth in the legitimate use of Bitcoin, it appears criminals are also flocking to Bitcoin in the country.
Local police recently seized 216 bitcoins from an individual who was considered to be involved with criminal activity. Interestingly enough, it appears this seizure of assets was not legitimate according to a local district court. The Suwon District Court ruled that Bitcoin is not subject to confiscation, according to local sources. This is a rather surprising precedent that could send shockwaves throughout the world. After all, it only takes one precedent like this one to change regulation in the future.
In this particular case, the arrested individual was charged with running an illegal pornography site. Although the site in question had quite a lot of members, the operator never reported much in the way of membership fees collected. It is unclear whether the membership fees were paid in Bitcoin or if the money was converted later on. If the latter were the case, it was only a matter of time before this individual got arrested.
While the charges against the individual himself were not dismissed, the confiscation of his Bitcoin assets has been deemed illegal. It is evidently “not appropriate to confiscate Bitcoins as they cannot assume an objective standard value.” That is a rather clear and interesting statement by the Suwon district court. It does not claim that Bitcoin does not have a value, but rather that it is electronic money with no physical representation. It is a bit unclear if this means we may soon see dedicated legislation for Bitcoin in South Korea.
This does mean that, even if bitcoins were to be seized as criminal profits, the value calculation of these assets would prove pretty difficult. Bitcoin does not have a fixed value whatsoever, and one would need to calculate the corresponding amount instead of simply confiscating it. There will likely be some opposition to this judgment, as not everyone will see eye to eye regarding this decision.
The bigger question here is whether cryptocurrencies will ever gain legal recognition in South Korea. There are plans to introduce some form of legislation in the coming months, but nothing has been set in stone just yet. This may very well be the only case in which the confiscation of bitcoins is deemed illegal. The government will try to prevent rulings like this one from happening in the future; that much is evident.
