In a groundbreaking move, South Korea’s Supreme Court has officially recognized Bitcoin and other cryptocurrencies held on centralized exchanges as seizable under criminal law. This landmark decision reinforces cryptocurrency’s status as recognized property and provides a clearer legal framework for dealing with digital assets in criminal cases.
Bitcoin Recognized as Legal Property
The ruling addresses legal uncertainty surrounding Bitcoin’s status in South Korea, a nation known for its widespread cryptocurrency adoption. It confirms that digital assets such as Bitcoin, despite being intangible, fall within the scope of lawful enforcement powers under the country’s Criminal Procedure Act.
The Case That Defined the Precedent
This pivotal ruling is tied to a 2020 money-laundering investigation, during which authorities confiscated 55.6 Bitcoin (worth approximately 600 million Korean won at the time) from an exchange account belonging to an individual known as Mr. A. The accused argued that Bitcoin could not be seized because it is not a physical object as traditionally required under the Criminal Procedure Act. However, both lower courts and the Supreme Court rejected this defense.
A Broader Legal Implication
The Supreme Court clarified that seizure laws are not restricted to tangible items. Assets subject to seizure now include digital and electronic representations of value, such as Bitcoin. The court emphasized the economic value, transferability, and owner control of cryptocurrencies, even when held on an exchange, legitimizing their status as property eligible for seizure during criminal investigations.
This judgment builds on a series of earlier court decisions in South Korea. For example, in 2018, Bitcoin was deemed intangible property that could be confiscated if involved in criminal activities. Similarly, cryptocurrencies have been treated as divisible assets in divorce cases.
Global Significance
Globally, the ruling brings South Korea into alignment with other jurisdictions, such as the United Kingdom, that are taking steps to recognize digital assets as legal property. With over 16 million South Koreans holding crypto accounts, the decision provides regulators and law enforcement agencies with definitive authority and reduces legal disputes. It also signals to the rest of the world that cryptocurrencies are becoming fully integrated into established legal and financial systems.
What This Means for Investors and Exchanges
While the judgment assures protection for users engaging in lawful crypto transactions, it also highlights the increasing need for monitoring and compliance among exchanges. This ruling may encourage platforms to bolster their security and anti-money laundering (AML) protocols to avoid regulatory issues.
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