SOUTH KOREA Law and Practice Contributed by: Byung Chang Lee, DR & AJU LLC
No General Rules on Exemplary Damages There is no special rule in relation to exemplary damages in addition to compensatory damages in the Korean legal system; however, when there is difficulty in proving damage amounts, such as mental distress or something similar, courts have a tendency to set a nominal amount of money as compensatory damages. 7.2 Laws to Protect “Banking Secrecy” The Act on Real Name Financial Transactions and Confidentiality regulates and protects so- called banking secrecy in general. Article 4(1) of the Act states that “a person who engages in financial institutions shall not share informa - tion or data on the details of financial transac - tions with another without the written request or consent of the title holder” unless there is a court order to submit or a warrant issued by a judge, etc. Typically, a party can file an application for an order to submit financial transaction informa - tion with the court during the course of civil or criminal claims in relation to fraud allegations, provided that the judge issues an order in this regard. Through the above procedure, a party can legitimately obtain confidential financial information. 7.3 Crypto-Assets Definition of Virtual Assets in Relevant Rules The Criminal Proceeds Concealment Control Act stipulates that “property resulting from a criminal act that falls under a serious crime or property obtained as a reward for the criminal act can be confiscated” (Article 2(2)(a), Article 8(1)). Additionally, the Enforcement Decree of this Act stipulates that “hidden property refers to cash, deposits, stocks and other tangible and intangible property value that is hidden by a per - son whose judgment on confiscation or collec -
tion has been finalised” (Article 2(2)). Intangible assets that have been acquired through criminal acts that fall under the serious crimes stipulated in the Criminal Proceeds Concealment Control Act may be confiscated. Article 2(3) of the Act on Reporting and Use of Specific Financial Transaction Information newly amended in 2021 stipulates that “a virtual asset means an electronic certificate (including any rights related thereto) that has economic value and can be traded or transferred electronically” . It is intended to provide a basis for securing the grounds for supervision and inspection by the head of the Korea Financial Information Analysis Institute for the implementation of anti-money laundering obligations, such as reporting suspi - cious transactions and high-value cash transac - tions by virtual-asset business operators. Whether a Virtual Asset Is an Intangible Property With a Property Value With the recent proliferation of cryptocurren - cies such as bitcoin, and the increasing number of cases of their misuse as a means of hiding assets, municipal governments across Korea are putting pressure on delinquents with a new method called virtual currency seizure. With the revision of the Act on the Reporting and Use of Specific Financial Transaction Information, virtual-asset business operators have to fulfil their respective obligations, such as customer identification and suspicious transaction report - ing, to existing financial institutions, thus making asset tracking possible. Related Supreme Court Cases In 2018, the Korean Supreme Court ruled that virtual currency could be confiscated as it was regarded as an intangible asset with property value (Supreme Court 2018do3619 Decision). The question is whether or not bitcoin is an
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