SEOUL, Jan. 31 (Korea Bizwire) — In a first for the justice system, on January 30 the Suwon District Court issued a ruling calling for the confiscation of bitcoins collected for illicit services rendered, essentially recognizing cryptocurrencies as assets of financial value.
The 33-year old defendant in the case was convicted of running an illicit website that was found to be in violation of child pornography laws and was sentenced to 18 months jail time along with the confiscation of 191 bitcoins and 700 million won (695.87 million won) in revenues generated from the criminal activity.
As of 11:15 a.m. on January 30, the market value for one bitcoin stood at 12.68 million won. In total, the 191 bitcoins were valued at 2.42 billion won.
The court explained its verdict, “The laws pertaining to the regulation and penalties regarding the concealment of illicit gains do not limit hidden assets to only physical objects, but to capital, deposits and stocks; these are considered to be assets. Bitcoins do not have a physical representation and are in digital file format, but since goods and services can be purchased via a cryptocurrency exchange it is correct to view bitcoins as income.”
The ruling overturned a prior decision made last September, when a court denied the prosecution’s request to confiscate the defendant’s bitcoins on the grounds that the cryptocurrency did not hold a physical form, as well as raising doubt as to whether the stock of bitcoins was linked to the illicit activity.
What the prosecution will do with the confiscated bitcoins remains uncertain.
An estimated 3 million South Koreans are believed to be active in the cryptocurrency market. With their proliferation, a small number of businesses have started to accept payment in some types of cryptocurrencies.
Lina Jang (email@example.com)