South Korean authorities are divided whether bitcoins from criminal proceeds should be confiscated. In a criminal case involving 216 bitcoins, the court previously ruled that the digital currency cannot be confiscated. However, the prosecutor is now appealing to the court to overturn that decision and allow the forfeiture of the bitcoins, now worth billions of won
Following the ruling in September by South Korea’s Suwon District Court that found the confiscation of bitcoins in a criminal case to be inappropriate, the case prosecutor has appealed to the court to overturn that decision, SBS reported this week. The prosecutor believes that all criminal proceeds should be forfeited.The case began when a web developer was indicted in April for allegedly distributing 235,000 instances of illegal pornographic material on adult websites over three years, as previously reported. Ahn, 33, operated adult websites with 1.2 million customers. The prosecutor seized his cash in the amount of 1.46 billion won as well as 216 bitcoins held in a wallet at an exchange. Since Ahn’s arrest, the 500 million won worth of bitcoins have appreciated to 4.25 billion won (about $4 million).
During the trial held in September, the prosecutor filed a lawsuit against Ahn and his family for 1.46 billion won in cash and the forfeiture of his 216 bitcoins.The Suwon District Court sentenced Ahn to one year and six months in prison. However, the judge decided to only collect 340 million won out of the 1.46 billion cash and threw out the confiscated bitcoins. He believes that 340 million won is the extent of the direct profits generated from Ahn’s pornography operation. As for the digital currency, the publication conveyed the judge’s decision:
Not only is it difficult to do this, but it is [also] not appropriate to confiscate bitcoins because they are in the form of electronic files without physical entities, unlike cash.
The news outlet explained that the ruling which states that bitcoin is “not appropriate for confiscation” was based on Article 10 of the Concealed Revenue Regulation Act.If the prosecutor is successful at keeping Ahn’s bitcoins, they will be transferred to the state treasury and will be auctioned, the publication detailed, adding that “the second sentencing [for this case is] scheduled for January 8th.”
The Year of Bitcoin continued apace with Fidelity Investments Charitable collecting a whopping 22,000,000 USD in the world’s most popular cryptocurrency. Bitcoiners are known for their generosity, and Fidelity has developed quite a relationship with the ecosystem especially over 2017.
“People are getting smarter about donating appreciated assets, and bitcoin is the epitome of appreciated assets this year,” Matt Nash of Fidelity Charitable told CNBC. He’s referring to a remarkable run in donations from its clients this year with regard to the digital asset.Last year, Fidelity collected a mere 6 million USD in bitcoin. The first 11,000,000 USD of 2017 were donated throughout the bulk of 2017, over roughly eleven months. As the year wound down, the fund saw a doubling of that amount in just December.The fund doesn’t actually hold bitcoin. Instead it funnels donations through the onboarding of popular crypto exchange Coinbase. Immediately, the decentralized currency is cashed into fiat and placed into specified account for distribution.Fidelity is best known as a full service broker, offering financial advice, baskets of mutual funds, and even life insurance. It’s a privately held global company with 45 thousand employees and revenues approaching 16 billion.
In 2017, the company really engaged in bitcoin-related businesses. While now that looks like a pretty great idea, even earlier this year bitcoin was thought too fringe for mainstream service providers such as Fidelity. By Summer, however, it added bitcointo its platform. Slightly before that, it integrated with Coinbase and began mining.The uptick in donations this December no doubt had to do with bitcoiners seeing what amounted to capital gains, which trigger certain tax issues in various countries. Many government revenue collectors also ask donations be made through windows of time in order to qualify for tax advantages.Mr. Nash reminded, “This is giving season, after all, starting in late November and running through Dec. 31.” And the advantage of giving bitcoin to a fund is that clients are able to collect receipts immediately while having the luxury of taking their time with ultimate distribution. The other is volatility, as it is very likely Fidelity cashed out at the top of the market through its regular protocols, say recently, thus avoiding a nasty 30 percent haircut for a charity.A final advantage in using an intermediary like Fidelity is the fact many charities are still wary of accepting bitcoin. Donors can be generous with bitcoin and not spook their favorite cause at the same time by donating through an established fund. Mr. Nash sums up the predicament nicely, “They’re going to give anyway. When they give, however, their view is that they should give the best asset that they can.”
