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Bitcoin (BTC) acquired a big authorized judgment from the Seoul High Court Civil Division, which has concluded that it shouldn’t be labeled 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 lengthen their jurisdiction to cryptocurrencies.

Case Background And Dispute

In a latest legal case in South Korea, the Seoul High Court Civil Division made a noteworthy choice relating to the standing of Bitcoin and its remedy below lending rules. The specifics of the case weren’t disclosed resulting from 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 below 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 modifications 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 introduced, the courtroom dismissed Company B’s claims. The courtroom explicitly said that the contract in query concerned digital belongings, particularly Bitcoin, slightly than conventional forex. Therefore, the courtroom concluded that the rules outlined within the Interest Limitation Act and the Loan Business Act weren’t relevant to this explicit 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, which means that 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