The Supreme Court of South Korea has confiscated 191 Bitcoins, worth approximately USD 1.43 million at time of writing, from the owner of a child pornography website.
The 33-year old suspect referred to as ‘Ahn’ had been previously arrested and indicted in May 2014 for violation of the Protection of Children and Juveniles From Sexual Abuse Law. Ahn was also previously sentenced to 18 months in prison and fined a further 696 million Korean won (KRW) by a lower court, which has been confirmed by both the high court and the Supreme Court.
First cryptocurrency confiscation
As reported by Yonhap News: “The Supreme Court upheld an appellate court’s conviction for a child pornography site operator, handing down a sentence of 18 months in prison, a forfeit of 191 Bitcoins and a penalty of 696 million won (USD 644,000).”
According to The Korea Times, since 2013, Ahn had distributed 235,000 illegal pictures online and generated KRW 1.9 billion from the website; after his sentencing, prosecutors argued that the 216 Bitcoins in his possession were illegally earned and pressed for them to be seized as cyber assets. This was then ruled against by a lower court as Bitcoins had no physical form.
However, an appeal was made and a high court agreed with the prosecution; ruling in their favour, the high court said that the cyber assets could be treated as profit earned from trade in goods. It deemed 191 out of those 216 were payment for illegal content.
The Supreme Court of South Korea said: “The cryptocurrency is recognized to have value so it can be confiscated.”
This is the first time cryptocurrency has been subject to confiscation in the country, and now it has solidified the classification of tokens; now South Korea’s government has a solid grounding to recognize and classify the value of or cryptocurrencies.
The ruling carries broader implications for present and future criminal cases that have cryptocurrencies tied to them; there is a significant ongoing case involving a mining scam with approximately USD 250 million worth of Ether tied to it.
Several individuals have had South Korean prosecutors file charges against them, they and the associated US-based cryptocurrency mining firm are accused of committing fraud by soliciting money from South Korean nationals and international investors.
Previously the South Korean exchange Upbit had been raided by authorities under the suspicion that is was carrying out fraudulent activities. Bitcoin News also reported other cryptocurrency related arrests in April when four crypto exchange executives were arrested and investigated for embezzlement.
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