Important news coming from South Korea. This time, the Supreme Court of the country has ruled that Bitcoin (BTC) is a legally recognizable asset. This should have an important consequence in the legal system of the country and also influence other legal systems to take a similar path.
South Korean Supreme Court: Bitcoin is an Asset
The decision taken by the court is a very important event that shouldn’t be taken in an easy way. Back in September 2017, the Suwon District Court charged a man involved in the distribution of child pornography. The individual was selling obscene material for Bitcoin (he had 216 BTC available).
But according to the court, the government couldn’t seize his Bitcoin’s because they were not tangible assets.
“It is not appropriate to confiscate bitcoins because they are in the form of electronic files without physical entities, unlike cash. Virtual currency cannot assume an objective standard value.”
But the Supreme Court has changed its opinion. The court explained that it was lawful to confiscate the cryptocurrencies that were gathered selling illegal files through internet.
“Korean law stipulates that a sizable hidden asset ranges from cash, deposits, stocks, and other forms of tangible and intangible objects holding standard value,” reads the ruling of the Court. “Bitcoin is intangible and coms in the form of digitized files, but it is traded on an exchange and can be used to buy goods. Therefore, receiving bitcoins is an act of taking profits.”
In this way, the government will be able to seize 191 bitcoins that are worth over $1.4 million dollars.
Why Is This Decision Important?
The decision is very important because of different reasons.
Around the world there are many governments that may be facing similar situation. Should the government be able to seize virtual currencies? How to do it? Did that happen before? Well, South Korea will set a precedent with this situation. Bitcoin is considered a legal asset around the world, which has value and, therefore, the whole legal system should be built around this distinction.
Another point that we could mention is that it could increase the trust of the population on Bitcoin. If in the past there were some investors that did not feel confident with the market, this situation could be totally positive for them. The government considers Bitcoin as an asset! Why not to start investing on it then?
Of course, it will also be important to follow how this decision will affect government officials. It is very important to have a government that will act logically and respecting this decision if investors want to increase the trust in the system.
Additionally, it could have implications on taxation as well. Why? Simply because having clear rules about what Bitcoin is and how it should be considered it can make regulations (including taxation) much more simple and profitable both for governments and enterprises.
If governments understand that Bitcoin – and other cryptocurrencies – can be used for paying employees, suppliers and more, then it will have a deep impact in the whole economic and legal system of the country.
At the moment, we need to wait how the legal environment will keep evolving after it. Enterprises and companies should start to adequate themselves to this circumstance. Ultimately, they will be able to have a clearer framework where to operate, which is always welcomed.