A South Korean court made a landmark ruling on 31st January on the economic value of the bitcoin. This was the first ruling that shows the value of the bitcoin as its ripples spread all over. The ruling was the overturns a previous court ruling made that did not recognize digital currencies as having any economic.
The Ahn Case
Ahn was indicted April last year for 235,000 instances of illegal distribution of illegal pornographic material on adult websites. At the time, he operated an adult website that had a customer base of 1.2 million customers and made millions from distribution of the pornographic materials. The prosecutors confiscated assets worth 1.46 billion as well as 216 bitcoins. At the time of his arrest, the 216 bitcoins were only worth just 500 million won but due to the recent price rise, the bitcoins are now worth a total of 4.25 billion won equivalent to $4 million.
The court Rulings
The case had two court rulings and one appeal and both had a different impact on the prosecutor, Anh case, and the crypto market in general. This has been the case from The United States down to Australia.
First case hearing:
On 9th September 2017, A South Korean district court ruled that the cryptocurrencies are not subject to confiscation. At the time, South Korea had no regulations surrounding the cryptocurrencies in general.
The Court ruling stated that it was not appropriate to confiscate bitcoins because they are electronic files without physical entities, unlike cash. The ruling further states that it would be difficult to calculate the exact value of the cryptocurrencies since they have no standard value. The court gave him a one year and 6 month sentence collecting 340 million won out of the 1.46 billion won and the bitcoins.
If the prosecutor had been successful and won the case, the confiscated bitcoin would have been auctioned and the money transferred to the treasury.
The appeal:
On 26th December 2017, as the bitcoin had hit its all-time high the prosecutor made an appeal to Suwon District Court to overrule the first ruling and allow the prosecutor to confiscate the Coins. The second sentencing is, however scheduled for Jan 8th.
The second ruling:
On January 31st, 2018 the Bitcoin’s Status was Re-Examined at a Suwon District Court in South Korea. A local media were quoted stating the ruling that bitcoin and other cryptocurrencies have an economic value and can be treated as a means of exchange. The court found out that the earlier ruling did not take to account that the cryptocurrencies can be converted into money through an exchange like Gold or Diamond, meaning that it can be used as a medium for exchange and payment through and should be considered as having economic value.
Even as the defense lawyers argued that recognition of the cryptocurrencies means that it will have to be transferred to the national treasury and used as a national budget.
What the ruling means for the crypto world
The ruling is a big boost for the crypto market as it struggles to convince masses of its economic impact and legitimacy. The digital currencies have been negatively received by influential economist, policy makers, governments and regulators with some going further to label it a bubble. However, these digital currencies have managed to maintain their value.
