Almost one year after Russia and following on Ukraine last October, South Korea is now considering Bitcoin as a financial asset.
South Korea and Bitcoin: a love-hate relationship
At the beginning of last year, a wind a panic was blowing on the crypto community, having an impact on price actions. Also known as ‘the country of Bitcoin’, South Korea gathers 20% of the global exchanges made in cryptocurrencies. It is the country were the biggest exchange platforms in the world are hosted. When it announced its intention to ban then to regulate Bitcoin to eventually tax the capital gain of users, could it have been anticipated that the country would finally settle on making it a financial asset?
Let’s go back in time
In September 2017, a 33-year-old man, Ahn, was convicted for the reselling illegal pornography. The incriminated website, up since 2013, had allowed him to collect the hefty sum of 216 bitcoins. Arrested and found guilty for having distributed 200,000 pornographic files, he was sentenced to 18 months of prison… but his bitcoins were not confiscated.
“It is not necessary to confiscate the bitcoins as they are virtual files, as opposed to physical money” said the tribunal.
Now, things are not going so well for Ahn. The Supreme Court has decided to come back on its decision. The current law was annulled and the Court seized 90% of the man’s bitcoins. On May 30, the highest magistrates of the country authorized the seizure of 191 out of the 216 bitcoins. According to the Court, this amount corresponds to what he earned through his illegal business.
“Cryptocurrency is now recognized as having value, it can therefore be confiscated” Court said later.
It was also mentioned that“Thesebitcoins were acquired through criminal activities. If we give the bitcoins back, he would then get back his gains obtained using his pornographic site”.
A double-edged victory
If Ahn will never get his bitcoins back and will have to do his time, this story serves as a symbol for the legal status of cryptocurrencies in this country. Indeed, this legal change towards cryptos gives them more legitimacy as the country is about to legalize and regulate ICOs. The government is prudent and has approached the crypto world with a two-sided mindset. However, this decision from the Supreme Court, is important regarding the formal frameset for the distribution of tokens, it seems to be clearer and more proactive than the previous ones.