Constitutional Court Dismisses Constitutional Complaint on 'Cryptocurrency Regulation Measures'

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[Asia Economy Reporter Baek Kyunghwan] The Constitutional Court has ruled that regulations introduced by the government to eradicate cryptocurrency speculation are not subject to constitutional review.

On the 25th, the Constitutional Court dismissed a constitutional complaint filed by lawyer Jeong and others against the government's emergency measures related to virtual currency, with a 5 to 4 decision by the justices.

Earlier, in December 2017, the government held a vice-ministerial meeting of related ministries chaired by the Director of the Office for Government Policy Coordination to discuss the establishment of emergency measures. This was a response to rising social unrest due to overheating cryptocurrency investments, cryptocurrency-related crimes, and suspicions of illegal fund inflows.

Specifically, to prevent speculative overheating caused by indiscriminate entry of new investors, the government prohibited minors from opening accounts, and banned financial institutions from holding, purchasing, acquiring as collateral, or investing in virtual currencies. Furthermore, it prohibited trading cryptocurrencies through virtual accounts and allowed deposits and withdrawals only between bank accounts verified by identity and the same bank accounts of virtual currency exchanges.

In response, lawyer Jeong and others filed a constitutional complaint, claiming that these government measures infringed on property rights and the right to pursue happiness by preventing cryptocurrency transactions.

However, the Constitutional Court held that their claims were not subject to constitutional review. The court determined that the government's cryptocurrency measures did not constitute an exercise of public authority. The court stated, "The real-name verified virtual account system is a kind of phased guideline intended to establish the system and induce voluntary compliance. Considering that the transaction value of cryptocurrencies in our country is unusually high compared to other countries and has repeatedly experienced sharp rises and falls, and that global cooperation requests for anti-money laundering are also presented, it is difficult to find any other reason why financial institutions would not respect these measures, which are part of phased guidelines to reduce the risks of cryptocurrency transactions."

However, Justices Lee Seon-ae, Lee Eun-ae, Lee Jong-seok, and Lee Young-jin dissented, stating, "These measures constitute an exercise of public authority subject to constitutional review and are not improper. They violate the principle of legal reservation and infringe on fundamental rights."

This content was produced with the assistance of AI translation services.