20s Using Wrongly Transferred Bitcoin Acquitted in Appeal Trial

"No compulsory legal tender status and no explicit penalty provisions"

A ruling has been made that using unidentified Bitcoin received in a virtual wallet cannot be charged as breach of trust or embezzlement.
[Image source=Yonhap News]

[Asia Economy Intern Reporter Lee Gyehwa] A man in his 20s who used unidentified Bitcoin transferred to his virtual wallet was acquitted in the appellate court.

On the 14th, the Daejeon District Court Criminal Division 3 (Presiding Judge Moon Bokyung) overturned the original sentence of 6 months imprisonment and acquitted Mr. A (27), who was charged with breach of trust.

Mr. A was charged with using about 6.6 Bitcoins (worth approximately 80.7 million KRW at the time) that were transferred into his cryptocurrency electronic wallet on August 27, 2019, for unknown reasons, by converting them arbitrarily into money or purchasing other Bitcoins.

The first trial court stated, "There is an obligation to keep the Bitcoins transferred to his account by mistake in order to return them to the original owner, so the breach of trust charge is recognized as guilty," but added, "However, since the trust relationship between Mr. A and the original Bitcoin owner is weak and to provide an opportunity for damage compensation, the defendant will not be detained in court," sentencing him to 6 months imprisonment.

However, the appellate court judged that Mr. A could not have a trust relationship with the victim and therefore did not fall under the category of 'a person handling another's affairs' as defined by the breach of trust crime. The breach of trust crime is established when a person handling another's affairs gains financial benefits by violating their duties. The court found it difficult to recognize a trust relationship between Mr. A and the Bitcoin owner in this case where virtual assets were transferred by mistake.

Currently, virtual assets are not legally treated the same as legal tender, and since transactions involve risks, they are not required to be protected equally under criminal law as legal tender. There is no explicit provision in current law to criminally punish a person who uses or disposes of virtual assets received by transfer.

The appellate court also acquitted Mr. A of embezzlement charges, stating that Bitcoin cannot be considered property as defined under the embezzlement crime. The court explained the reason for overturning the original sentence, saying, "Bitcoin has no physical substance and is merely digital electronic information managed administratively, so it is not included in the property defined by current criminal law," and "Even if the defendant arbitrarily consumes it or refuses to return it, the defendant cannot be held liable for embezzlement."

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