Bitcoin Court Ruling

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A Korean court has ordered the confiscation of bitcoins gained as the result of a crime. This ruling drew wide attention as it was the first court decision in Korea to acknowledge the economic value of the digital currency.

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If one received bitcoins instead of real money for operating an illegal pornographic site, can the digital currency be confiscated? In the sentencing hearing for the operator of an illegal porn site, the Suwon District Court ruled that virtual currency gained as criminal profit may be confiscated. In general, only tangible and intangible assets with economic values, such as cash and stocks, can be confiscated. But the court believed that bitcoin is a similar asset by social norms. The court also justified its decision to confiscate the digital currency saying that diverse economic activities that grant economic value to bitcoin are taking place. The latest ruling will result in the seizure of 191 bitcoins, That amounts to about 2.4 billion won in cash at the current rate of about 12.6 million won per bitcoin. This ruling is the first one to acknowledge the economic value of virtual currency traded electronically.

[Soundbite] Lee Sang-hyun(Judge, Suwon District Court) : "This ruling demonstrates that bitcoin is regarded socially as an intangible asset with economic value and as a potential source of criminal profit that can be confiscated."

However, the Suwon District Court made it clear that this ruling is unrelated to the debate over whether digital currencies can be used as legal tender.