South Korea’s top court rules police can seize bitcoin held on exchanges

South Korea’s highest court said investigators can take Bitcoin stored on cryptocurrency platforms during criminal probes, ending a legal fight that questioned whether digital money counts as something that can be confiscated.

The Supreme Court rejected an appeal from someone caught up in a money laundering case who argued that Bitcoin kept on an exchange isn’t a physical item and therefore can’t be seized.

The case started when police took 55.6 Bitcoin from an exchange account during their investigation. The digital currency was worth around 600 million Korean won, or about $413,000, when authorities grabbed it. The account belonged to a person referred to only as Mr. A.

Mr. A pushed back against the seizure. He said the country’s Criminal Procedure Act only allows police to take “physical objects” as evidence or for confiscation. Since Bitcoin exists only as digital data, he claimed it didn’t fit that description under Article 106 of the law.

A lower court in Seoul threw out his complaint, saying the seizure was legal. Mr. A then took his case to the Supreme Court last December.

The country’s top judges sided with prosecutors. They said the criminal law covers both physical items and electronic information.

“Under the Criminal Procedure Act, seizure targets include both tangible objects and electronic information,” the court stated. It explained that Bitcoin works “as an electronic token with the ability to be independently managed, traded, and substantially controlled in terms of economic value.”

The court concluded that Bitcoin meets the standard for an asset that investigators can seize. “The disposition in this case, which seized Bitcoin under Mr. A’s name managed by a virtual asset exchange, is lawful, and there is no error in the lower court’s decision to dismiss the motion for reconsideration,” the ruling said.

Previous rulings recognized bitcoin as property

This isn’t the first time Korean courts have dealt with cryptocurrency. The Supreme Court ruled back in 2018 that Bitcoin is intangible property with actual economic value, meaning it can be seized if you obtained it illegally. Courts that same year also started treating crypto tokens as divisible assets in divorce proceedings. By 2021, judges were clearly treating Bitcoin as virtual property with economic value under criminal law.

The ruling comes as South Korean authorities have intensified their crackdown on crypto-related crimes, with multiple cases involving cryptocurrency fraud and money laundering making headlines. As previously reported by Cryptopolitan, a crypto exchange operator was sentenced to four years in prison for attempting to sell military secrets to North Korea in exchange for Bitcoin.

South Korea isn’t alone in this

Last month, the UK passed legislation officially recognizing digital assets as property, giving them the same legal status as houses, cars, and other traditional assets. The law came out of recommendations from the Law Commission of England and Wales and is designed to help courts navigate theft, inheritance, and bankruptcy cases involving crypto.

Etay Katz, who leads the digital assets team at law firm Ashurst, called the UK law “a welcome and timely statutory recognition of the fundamental property quality in crypto assets” when speaking to Decrypt.

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