• The Seoul High Court Civil Division recently ruled that Bitcoin should not be treated as money, meaning that the primary cryptocurrency is not subject to the local lending business legislation and interest rate rules.
• This decision was made after a case between two firms who had agreed to lend 30 BTC for three months, with an extended rental period of April 2021 at 10% per annum interest.
• The court did not accept Company B’s argument that Company A violated the Interest Limitation Act and Loan Business Act by changing rates, as cryptocurrencies are not money.
South Korean Court Rules: Bitcoin is Not Money
The Seoul High Court Civil Division has recently ruled that Bitcoin should not be treated as money, meaning that the primary cryptocurrency is not subject to the local lending business legislation and interest rate rules.
Case Between Two Firms
This ruling came about after a case between two firms whose names were undisclosed due to legal reasons. Company A had agreed to lend 30 BTC for three months with an interest rate of 1.5 BTC for the first two months and 0.75 BTC for the last month. When Company B failed to comply with this agreement, Company A extended the rental period until April 2021, changing the interest condition to receiving 0.246 BTC per month (equivalent to 10% per annum).
Court Does Not Accept Arguments
Company B argued in court that “Company A violated the Interest Limitation Act and Loan Business Act” by changing rates; however, this argument was not accepted by the court as they stated that “the object of this contract is virtual assets, so it cannot be interpreted as money” under current regulations and laws in South Korea. As such, they concluded that “the interest limitation law and loan business law do not apply” in this case due to cryptocurrencies having no physical form or intrinsic value associated with them.
Implications of Ruling
This ruling has implications on how cryptocurrencies are treated in South Korea going forward; it shows that they will no longer be treated as money but instead as digital assets or property rights according to laws governing real-world contracts like those involving loans or mortgages . This means that any disputes over loan agreements involving cryptocurrencies have a chance of being handled differently than those involving fiat currency by courts in South Korea from now on.
In conclusion, this recent ruling from South Korea’s High Court demonstrates their intent on treating cryptocurrencies differently than traditional money when it comes to legal matters such as loan agreements or disputes over payments made via virtual currencies rather than regular ones like US Dollars or Euros . Though there are still some uncertainties surrounding how these new regulations will affect businesses dealing with digital assets in future cases , it provides clarity on where South Korea stands regarding its stance towards cryptocurrencies which could help foster more innovation within their borders moving forward into 2021 and beyond