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Korea's Top Court Acknowledges Economic Value of Cryptocurrencies
Cryptocurrencies Subject to Taxation
Korea's Top Court Acknowledges Economic Value of Cryptocurrencies
  • By Yoon Young-sil
  • December 9, 2019, 11:59
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Cryptocurrencies are subject to taxation as the Supreme Court has ruled that the Bitcoin is an intangible asset.

The Supreme Court of South Korea acknowledged the economic value of cryptocurrencies for the first time in May last year. At that time, the court ruled that the Bitcoin is an intangible asset, implying that cryptocurrencies are subject to taxation.

Earlier, from December 2013 to April 2017, a South Korean surnamed Ahn ran an illegal porn website with servers located in the United States. That person was arrested and charged with approximately 1.9 billion won in ill-gotten gains from 1.22 million or so members.

At the first trial, the prosecution requested the court to confiscate 216 Bitcoins worth 500 million won, claiming that the coins were criminal proceeds. The court did not accept the request, saying, “Bitcoins are electronic files without a tangible form, and thus it is not appropriate to confiscate the coins.”

The second instance court, however, regarded the coins as assets despite the intangibleness and ruled that the coins can be confiscated. Likewise, the Supreme Court ruled that intangible assets also can be confiscated according to the Act on Regulation of Punishment of Criminal Proceeds Concealment and the assets include the Bitcoin.

Legal and tax experts explained that the Supreme Court ruling alone is enough to include cryptocurrencies into the scope of taxation when it comes to inheritance and gift taxes covering comprehensive properties although tax law revision is required in the case of income tax.