No interest cap for crypto as it is ‘not money,’ Korean court says

A dispute between two anonymous Bitcoin managing firms has led a South Korean court to rule out legal interest rate limits on crypto as it is “not money,” Forkast reported.

In October 2020, an unnamed company borrowed 30 bitcoins from another firm, which were to be returned within half a year with monthly payments at a 5% interest rate.

With this agreement amounting to a 30% interest rate within that period, the borrower complained that this amount was well over the 24% interest limit imposed by the Act on Registration of Credit Business and Protection of Finance Users, as well as the Interest Limitation Act.

The South Korean court said that “[the acts] limit the highest rate of interest on money loans, but in this case, the subject of the agreement is Bitcoin.”

With this decision, the borrower has been instructed to return the 30 bitcoins or its worth in cash (US$604,320 currently).

South Korea has recently looked to further regulate digital assets in the country following the Terra crash in May.

See also: A who’s who of projects facing frostbite in the crypto winter (Updated)