South Korea’s Supreme Court to Judge Whether Local Crypto Regulation Is Unconstitutional

Rage Comment : A South Korean law firm filed a constitutional complaint against the South Korean government's cryptocurrency regulation in December last year on the grounds of infringing people's property rights. The case has now been submitted to the Supreme Court of South Korea. The court will consider the reasons given by the law firm and judge whether the government's regulatory behavior is unconstitutional. If it is ruled unconstitutional, all cryptocurrency regulations of the South Korean government may be revoked.

Translation: Ina

The case was taken to the Supreme Court

At the end of December last year, a South Korean law firm filed a constitutional complaint against the South Korean government's regulation of cryptocurrencies. The case has now been submitted by the Constitutional Court of South Korea to the Supreme Court.

Lawyer Jeong Hee-chan said, "Regulating transactions through administrative guidance without any legal basis is an infringement of property rights." The Korea Times quoted Jeong's law firm as saying:

“Such government regulation is to devalue virtual currencies by increasing the difficulty of transactions… Therefore, it is an act of infringing on people’s property rights through illegal government measures.”

Jeong clarified:

"We agree that regulation is necessary, but it should be implemented after relevant laws are introduced. Our petition also asks the government to respect people's property rights and regulate after reaching a social consensus."

Is the real-name system unfair?

The South Korean government has ordered major banks to implement a real-name system for issuing cryptocurrency exchange accounts starting January 30 as part of its regulation.

The regulator said that all virtual accounts previously used by cryptocurrency traders must be converted to real-name accounts so that funds can be deposited for trading. But a week later, only 8.21% of the virtual accounts of the four major cryptocurrency exchanges in South Korea were converted to real-name accounts, and 1.6 million accounts failed to be converted.

In addition, the bank only provides account conversion services for four exchanges: Upbit, Bithumb, Coinone and Korbit. Small exchanges are currently unable to use the real-name system. The report said:

“The key issue is the unfairness of the real-name system for virtual currencies… The government should clarify the basis for implementing the real-name system for virtual currencies. Only laws enacted by Congress can restrict the fundamental rights of the people as stipulated in the Constitution.”

South Korean media "Top Star News" pointed out: "The government insists that the real-name system is legal and based on the Banking Act and the Financial Information Act."

“If the court rules that it’s unconstitutional, then all existing government cryptocurrency regulations could be lifted.”

The report said that according to regulations, the case should be concluded within 180 days from the time it was submitted to the Constitutional Court on December 20, so the case is expected to have a result by the end of June.