South Korea’s Supreme Court Orders Seizure of $1.4 Million in Bitcoin in Criminal Case

Translator: ElaineHu

The South Korean government will forfeit 191 bitcoins, or about $1.43 million, seized in a child pornography cybercrime case in which the perpetrators have been sentenced to prison.

South Korea’s Supreme Court ruled on Wednesday that cryptocurrencies can be considered valuable assets and can be confiscated in criminal prosecutions, Yonhap News Agency reported.

After he was first charged in May 2014, a lower court rejected prosecutors' order to seize the defendants' bitcoin holdings, but that was ultimately overturned by the Supreme Court, which upheld the decision to forfeit the assets.

A lower court had previously ruled that the defendants’ cyber assets could not be seized because they had no physical form and existed only in electronic form. The Supreme Court overruled that ruling, holding that cryptocurrencies could count as “profits from the trade of goods.” However, it remains to be seen what means the authorities will use to confiscate cryptocurrencies and how they will be managed.

The operator of the website was also sentenced to 18 months in prison and a fine of 696 million won in addition to the confiscation of Bitcoin.

The ruling could have wide-ranging implications for other criminal cases involving cryptocurrencies, a major reason for a series of attacks on cryptocurrency exchanges aimed at obtaining user passwords and stealing funds, which have resulted in executives being jailed and equipment being seized.

South Korean prosecutors are bringing charges against a U.S.-based cryptocurrency mining company accused of using fraudulent means to defraud funds from South Korean nationals and investors around the world in a major $250 million mining scam.