Incorrect Use of Bitcoin... Supreme Court Rules It Is Not Embezzlement Crime

[Asia Economy Reporter Baek Kyunghwan] The Supreme Court has ruled that a person who used Bitcoin mistakenly transferred to a virtual wallet through an unknown route cannot be punished for breach of trust.

On the 16th, the Supreme Court's 3rd Division (Presiding Justice Kim Jae-hyung) overturned the lower court's ruling that sentenced Mr. A to 1 year and 6 months in prison on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement, etc.) and remanded the case to the Suwon High Court.

Mr. A was prosecuted for transferring 199.999 Bitcoins from a foreigner, which were deposited through unknown circumstances, to another of his own accounts at his residence on June 20, 2018. Mr. A used the transferred Bitcoins for personal purposes and returned 158.22 Bitcoins to the victim just before the trial the following year.

The prosecution also applied breach of trust charges against Mr. A in case the embezzlement charges were not recognized in court. In fact, the first and second trials did not recognize the embezzlement charges, stating that Bitcoin has no physical substance and is merely digital electronic information managed administratively.

However, they found him guilty of breach of trust. If someone received and held Bitcoins owned by others without a special reason, it constitutes 'unjust enrichment' and must be returned, and according to the principle of good faith, the person is obligated to protect and manage the victim's property until the return.

But the Supreme Court's judgment was different. The court stated, "In cases where virtual assets are transferred to another person's virtual asset electronic wallet without legal cause due to the error of the virtual asset rights holder or the virtual asset operating system, there may be an obligation to return unjust enrichment," but added, "this is merely a civil obligation between the parties."

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