The South Korean local court stated that cryptos cannot be considered as a fiat, while interest cannot be applied on borrowings.
The Seoul-based court has issued a ruling on the case of two crypto companies. Regarding the Bitcoin borrowing among the defendants, he said that no interest can be applied to the borrowing.
South Korea Maintains Crypto Asset Regulations
The Seoul court has reached a verdict in the case against the two companies. According to court reports, there was a Bitcoin problem among companies whose names were kept confidential. Firm A, one of the companies that were processed with a formal name in the report, lent 30 Bitcoin to firm B. The two companies agreed on a monthly interest rate of 5 percent on the debt payment method.
However, firm A filed a lawsuit against firm B, which did not fulfill its debt obligations. In this case, which was brought to the court, it was argued that even if firm A was right, interest could not be applied to the debt obligation of firm B. According to the court, interest cannot be charged on borrowings as cryptocurrencies are not considered a fiat.
South Korea, which has a place in the developing crypto money economy, has been working hard on regulation recently. Studies on the use of cryptocurrencies in fraud, trade, borrowing and the country’s economy do not slow down.
The Asian country has added digital assets to its desire to fast-track technology. The country has started to prepare appropriate laws for technologies that are beginning to be accepted around the world, such as cryptocurrencies, metaverse, NFT. In particular, the investigation against Terra founder Do Kwon paves the way for the legal use of digital assets.
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