It is widely known that one of the main reasons bitcoin is not completely accepted by many regulators is its link with illicit activities.
The South Korean authorities are divided when it comes to the question whether or not they should confiscate bitcoins related to criminals. In one criminal case, which involved 216 bitcoins, the tribunal expressed the opinion that the digital currency could not be confiscated. Nevertheless, the prosecutor now appeals to the tribunal to revoke the aforementioned decision and allow the confiscation of bitcoins, which are now worth thousands of South Korean wons. According to the prosecutor, all the criminal earnings should be confiscated.
The case started when one web developer was accused in April of allegedly distributing 235,000 instances of illegal pornographic material to adult websites during three years.
The developer is called Ahn (33 years old) and he operated adult websites with around 1.2 million users. The prosecutor confiscated 1,46 billion wons in cash and 216 bitcoins from Ahn’s wallet. In the period after the arrest, the value of 500 million wons in bitcoins went up to 4.25 billion wons (around four million US dollars).
The tribunal sentenced Ahn to one year and six months of prison. The judge decided to charge him only 340 million wons out of 1.46 billion in cash and discarded the confiscated bitcoin. During the trial held in September, the prosecutor demanded that all the confiscated funds are taken from Ahn. The judge thinks 340 million wons is the amount Ahn earned from his pornographic websites. When it comes to the confiscated bitcoins, the judge said: “It is not only difficult to do this, but also inappropriate to confiscate bitcoins because they are in the form of digital files without physical characteristics, which is not the case with cash.”
If the prosecutors manages to keep the confiscated bitcoins, these will be transferred to the state treasury and auctioned.