South Korean Prosecutors Sell (and Profit Off) Bitcoin Taken From Criminals

For the first time in the country’s history, South Korean prosecutors have sold bitcoin confiscated from criminals, CoinDesk Korea reported. The sale turned a profit of around 12.3 billion won (around US$10.9 million), which has been transferred to the national treasury. 

On April 1, the Suwon District Prosecutors' Office announced it had sold “191 bitcoin confiscated in April 2017 from the operator of the illegal pornography site, AVSNOOP, identified thus far as 'Ahn' (assumedly his surname) at around 64,260,000 won ($57,000) per coin.”

In South Korea, producing, selling and distributing pornography is prohibited by law.

Authorities originally confiscated 216 BTC from Ahn, but only 191 were determined to be “of criminal origin” by the Korean Supreme Court in a ruling in May 2018. It was the first time a South Korean court acknowledged cryptocurrency as “intangible assets” and gave the authorities the right to confiscate crypto acquired through, or used for, illicit activity.  

While the U.S. government has been auctioning bitcoin since 2014, Korean prosecutors have held on to the confiscated bitcoin for the past four years due to legal ambiguity surrounding cryptocurrency. According to South Korea’s Yonhap News Agency, prosecutors moved to liquidate the confiscated bitcoin on March 25, the exact day when the country’s crypto legislation went into effect. The revised legislation classifies crypto as “virtual assets.”

When prosecutors confiscated Ahn’s bitcoin in April 2017, it was worth around 270 million won (around $240,000). The amount when sold on March 25 is over 45 times that. 

Ahn operated AVSNOOP from May 2014 to when he was arrested in April 2017. He served 18 months behind bars and was released in October 2018. It looks like he will receive the remaining 25 BTC determined to be legit.