The Supreme Court of South Korea has ruled that cryptocurrencies are eligible for confiscation in enforcement action against criminals, paving the way for the seizure of some $1.4 million in a high-profile child pornography case.
The ruling effectively gave authorities the green light to confiscate 191 BTC Coins from a 33-year-old man, convicted of operating a child pornography website, Yonhap News reported. The confiscation in this case comes on top of a prison sentence, totalling 18 months, and a further fine in the order of KRW696 million—equivalent to over $640,000.
The case worked its way through the lower courts, with an initial conviction overturned on appeal on the basis that cryptocurrency could not be confiscated, as it exists only in electronic form. However, with the Supreme Court ruling, a new precedent has been set for future cases, which will see cryptocurrency holdings subject to seizure, as with other types of criminal assets.
While acknowledging that cryptocurrency existed electronically, the Supreme Court’s rationale held that cryptocurrency holdings could amount to “profit earned from trade in goods,” which would bring them within the remit of seized assets.
The implications of the ruling could now impact on a number of other pending trials and investigations, including those of executives at some high profile cryptocurrency exchanges.
Accusations of embezzlement and fraud have seen exchange executives detained in South Korea, alongside the seizure of hardware—including as part of an alleged Ethereum mining scam thought to be worth as much as $250 million.
Should the courts decide to go for seizure of cryptocurrency from those individuals, the recent Supreme Court ruling now gives them an express legal basis on which to do so. The case goes to the crux of the problem of classifying cryptocurrencies, an issue that has posed problems for regulators, lawmakers and the judiciary in a number of countries to date.
Issues including tax status, applicability of existing financial laws and regulations, and particularly issues around ICOs and securities laws have all forced authorities to turn their attention to a legal definition of cryptocurrencies.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.