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South Korean court urges not to consider cryptocurrencies as money

A Seoul court ruled that a certain crypto lender A had legal grounds to impose any interest rates on a cryptocurrency loan taken by company B.

The true names of the companies involved in the case were not disclosed.

Earlier this month, crypto lender A filed a civil lawsuit against firm B demanding bitcoins that company B owed to A. In October 2020, plaintiff A and firm B signed an agreement under which A lent B 30 bitcoins (at the time of writing about $604,320) with repaid in six months with monthly interest payments.

The parties have agreed on a monthly interest rate of 5%, which is converted into an annual interest rate of 60%. After the debtor failed to return the borrowed cryptocurrencies after the agreed settlement date, the plaintiff filed a lawsuit.

During the litigation, Company B claimed that Company A had violated two laws: the limitation of interest and the registration of a credit business. Laws limit all interest on a loan to an annual rate of 24%. The judge of the Seoul Central District Court ruled that the current laws do not apply in an agreement between companies:

“These two acts limit the maximum interest rate on cash loans, but in this case, the subject of the agreement is bitcoins, not money.”

As a result of the proceedings, the South Korean court ruled in favor of the cryptocurrency management company A.

In September, the head of the Financial Supervisory Service of South Korea (FSS), Lee Bok-hyeon (Lee Bok-Hyeon), said that some cryptocurrencies can be considered as securities. He noted that the status of cryptocurrencies should be determined by the regulator. However, prosecutors should also have such a right.

Source: Bits

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