Bitcoin (BTC) acquired a major authorized judgment from the Seoul High Court Civil Division, which has concluded that it shouldn’t be categorised as cash.
This pivotal ruling exempts the main cryptocurrency from adhering to the lending enterprise rules in South Korea, and it successfully declares that the customary guidelines governing rates of interest usually are not relevant to BTC.
This choice, as reported by a translation of a local news article from Hangkyung, affirms that the prevailing legal guidelines regarding curiosity restrictions and mortgage companies don’t prolong their jurisdiction to cryptocurrencies.
Case Background And Dispute
In a current legal case in South Korea, the Seoul High Court Civil Division made a noteworthy choice relating to the standing of Bitcoin and its therapy beneath lending rules. The specifics of the case weren’t disclosed as a result of authorized causes, with the concerned events being known as Company A and Company B.
According to the courtroom proceedings, Company A entered into an settlement with Company B in October 2020, whereby the previous would lend 30 BTC to the latter for a period of three months. The phrases of the settlement stipulated an rate of interest of 1.5 BTC for the primary two months and 0.75 BTC for the ultimate month.
Bitcoin loses just a few hundred and now at $30,250. Chart: TradingView.com
However, Company B failed to meet its obligations beneath the preliminary phrases, resulting in an extension of the contract till April 2021. As a part of the extension, the curiosity situation was revised, and Company A would now obtain 0.246 BTC monthly, equal to an annual rate of interest of 10%.
Subsequently, Company B initiated a lawsuit towards Company A, alleging that the rate of interest adjustments violated the Interest Limitation Act and the Loan Business Act. The defendant argued that Company A was in violation of those legal guidelines by altering the agreed-upon charges.
Court Ruling On Bitcoin’s Applicability Of Lending Laws
In response to the arguments offered, the courtroom dismissed Company B’s claims. The courtroom explicitly said that the contract in query concerned digital property, particularly Bitcoin, fairly than conventional foreign money. Therefore, the courtroom concluded that the rules outlined within the Interest Limitation Act and the Loan Business Act weren’t relevant to this specific case.
Moreover, the courtroom officers went a step additional by asserting that “the object of this contract is virtual assets, not money, so the interest restriction law and the loan business law do not apply.” In essence, because of this it isn’t possible to im pose rate of interest limitations when lending Bitcoin, as per the prevailing authorized framework within the nation.
In accordance with the authorized system of South Korea, events concerned in a case have the chance to problem a verdict twice, permitting Company B the choice to doubtlessly contest the ruling on the nation’s highest judicial physique, the Supreme Court.
Featured picture from Reuters
