South Korea’s top court confirmed Wednesday has ruled that cryptocurrency is an asset with economic value that can be confiscated. In the case involving 191 bitcoins from a person named Ahn, a 33-year old man, worth 2.4 billion won (US$2.3 million) earned from running an online pornography website.
In doing so the Supreme Court recognised cryptocurrency as an “asset with measurable value.”
It said Ahn increased the value of his bitcoins by running the pornography website.
Ahn was already sentenced to 18 months imprisonment along with a fine of 696 million won ($646,000) by a lower court, confirmed by both a high court and the Supreme Court.
This marks the first time a cryptocurrency has been subject to confiscation.
The cryptocurrency is recognized to have value so it can be confiscated,
the Supreme Court stated in its judgment.
This was a landmark judgment for South Korean administration as for the first time cryptocurrency is subjected to confiscation in the country.
The newspaper detailed that since 2013, Ahn distributed 235,000 obscene pictures online and made 1.9 billion won, he was arrested and indicted in May 2017 for violating the Protection of Children and Juveniles From Sexual Abuse Law.
After his sentencing, prosecutors also claimed that the 216 bitcoins in his possession were earned illegally and urged they be seized as cyber assets. However, a lower court ruled against them, stating bitcoins only existed electronically and had no physical form.
On appeal, a high court ruled in the prosecution’s favor, saying the cyber assets could be seen as profit earned from the trade in goods. It said 191 of the 216 bitcoins were payment for the illegal online content.
Under Korean law, seizable hidden assets range from cash, stocks, and money in deposit accounts as well as other tangible and intangible assets that hold value.
“The bitcoins were earned from the proceeds of crime,” the high court order noted. “If we return the bitcoins to Ahn, it will be giving him back profits that were earned illegally from running an online porn site.”
The Supreme Court upheld this ruling and thus will allow any cyber assets gained from illegal activity such as gambling, drug deals, pornography and prostitution to be confiscated.
Since Ahn was convicted in last September, the value of his bitcoins increased fivefold.