• The South Korean Supreme Court docket has dominated that digital currencies on exchanges could be seized based mostly on present legislation.
• This choice applies in prison investigations comparable to cash laundering, fraud, and embezzlement.
• Whereas law-abiding customers won’t be affected, the ruling closes a loophole in international crypto seizure requirements.

South Korea’s Supreme Court docket has dominated that digital currencies held on native exchanges could be seized beneath present legislation. This choice eliminates a long-standing authorized grey space and adjustments the way in which crypto property are dealt with in prison circumstances.

The ruling impacts customers of main exchanges comparable to Upbit and Bithumb, which collectively maintain greater than $33 billion in cryptocurrencies. On January 8, the court docket dominated that Bitcoin and different digital currencies fall beneath the class of seizable property beneath the Felony Process Code.

The case started with a cash laundering investigation in 2020, when authorities seized 55.6 BTC value about 600 million received (roughly $413,000 on the time) from the suspect’s alternate account. The defendants argued that Bitcoin couldn’t be seized as a result of it had no bodily type.

The court docket disagreed, stating that Bitcoin is an digital asset with financial worth that may be owned, traded, and managed, making it topic to authorized seizure.

In gentle of the earlier Bitcoin ruling

This choice builds on earlier Supreme Court docket selections. In 2018, a court docket dominated that Bitcoin is an intangible asset with financial worth and could be confiscated if obtained by means of prison exercise. Subsequent rulings additional acknowledged Bitcoin as a type of property in reference to fraud and monetary crime circumstances.

The newest ruling goes a step additional and explicitly confirms that cryptocurrencies saved on centralized exchanges like Upbit and Bithumb can’t solely be confiscated after a conviction, but in addition seized throughout an investigation.

What this implies for Upbit and Bithumb customers

This ruling doesn’t imply that authorities are free to grab cryptocurrencies. Seizures are solely allowed throughout prison investigations into crimes comparable to cash laundering, fraud, bribery, embezzlement, and tax evasion.

Primarily based on the clarified guidelines, prosecutors and police can request exchanges to freeze or switch cryptocurrencies suspected of prison exercise. Exchanges are regulated and should adjust to these authorized necessities.

For law-abiding customers, there isn’t any distinction in how you utilize Upbit or Bithumb. The ruling primarily establishes clearer enforcement guidelines and makes it simpler for authorities to trace and get well illicit funds.

Is the $33 billion cryptocurrency actually in danger?

South Korean exchanges maintain greater than $33 billion in cryptocurrencies, however these funds aren’t routinely in danger. Authorities can solely seize property if there’s a clear authorized foundation associated to a particular investigation.

The ruling primarily closes a loophole that permits suspects to say that their digital property couldn’t be seized. With this clarification, South Korea will now align extra intently with international locations such because the US and UK, the place courts already acknowledge digital property as seizable property.

Associated: South Korea’s digital asset tax plan could also be delayed once more till 2027