The case was first heard in the SuWon District court in 2017, where Ahn was charged for the proprietary ownership of a child pornography website dating back to 2013, responsible for the circulation of 235,000 illicit files. Despite the court reaching a guilty verdict and sentencing Ahn to 18 months in prison for the crime, they did not deem it lawful to expropriate the defendant’s 216 Bitcoins he had accumulated from his criminal activity.
The district judge held that is was “not appropriate to confiscate Bitcoins because they are in the form of electronic files without physical entities, unlike cash… virtual currency cannot assume an objective standard value.”
This District Court ruling was repealed a year later and recently heard in the South Korean Supreme court, where the decision was revised. After some deliberation the appellate court accepted a new position that
“Korean law stipulates that a seizable hidden asset ranges from cash, deposits, stocks, and other forms of tangible and intangible objects holding standard value… Bitcoin is intangible and comes in the form of digitized files, but it is traded on an exchange and can be used to buy goods. Therefore, receiving Bitcoins is an act of taking profits.”
Following this new precedent, the South Korean Supreme court identified digital assets as having real world value; a huge feat for cryptocurrencies. It also allowed the court to seize 191 of the 216 Bitcoins from Ahn, at a net worth of $1.4million, along with $645,000 in cash. The court reportedly arrived at this precise amount after tracking every digital payment made to Ahn, via the Bitcoin ledger.
As much of a benchmark decision this has been for digital assets, as part of their growing adoption across international legislation, this new legal recognition as an intangible asset has great potential for being a double-edged sword. On one hand, we’re now one step closer to reaching mass market adoption, as Bitcoin achieves wider acceptance in the global market, while on the other hand this new ruling to allow courts to seize digital assets could be the tip of a very ugly iceberg. 1933 Gold Expropriation comes to mind.
This article appeared first on Cryptovest
