The Fourth Industrial Revolution optimizes human lifestyles through the convergence of reality and virtuality. It is anticipated that it would be realized through ‘Smart Transform’ which combines reality-datarizing digital transform and data-realizing analogue transform. The Smart Transform has a virtuous cycle structure in 4 stages: 1) Datarization, 2) Informatization, 3) Intelligence, 4) Smartization.
In crime prevention, stage I is ‘datarization’. The related information is collected through diverse IoT devices such as CCTV and drone as well as 112·119 calls. Stage II is ‘informatization’ in which tax delinquency information and financial transaction information as well as criminal history including sex offenders’ personal information are collected, generating big data. Stage III(‘Intelligence’) is a process to analyze the data collected through artificial intelligence(AI). During this stage, it is able to integrate and analyze crime scene, time and skill-related information and derive the areas and time of high crime probability. Based on these analysis results, Stage IV(‘Smartization’) is performed. In other words, the efficiency of police duties can be enhanced by optimizing crime prevention strategies such as concentration of police force in areas and time of high crime probability. It can also increase a perceived safety index which represents how much citizens feel safe from crime. The big data generated throughout these processes are used to enhance crime investigation efficiency, enabling optimum investigation. In fact, the digital transform for crime prevention and investigation has already begun, using ‘predictive policing(PredPol)’ and ‘domain awareness system(DAS)’.
During the digital transform of crime prevention and investigation, the IoT enables data collection and information sharing through the networked devices. While conventional CCTV cameras or license plate readers would be installed for the purpose of data collection only, the new technology has made it possible to share data through individual networked devices. It is also possible to extend the purposes or scope of the use of data collected through such digital devices. For example, conventional security CCTV cameras have been used in integrating and managing data on various urban situations such as traffic, disasters and environment. The Smart City Integrated Platform Distribution Project launched by the Ministry of Land, Infrastructure and Transport(MOLIT) targets to build infrastructure needed to realize ‘Smart City’ through such linkage services.
Meanwhile, blockchain technology has been recognized as one of the promising next-generation engines for growth. However, the utilization of such new technology is still under a review of its possibility as a public sector-led pilot project. In other words, it is too early to say that blockchain technology is widely used in the Republic of Korea and around the world. From a technical perspective, even though blockchain technology is not definitely linked with cryptocurrency, it is cryptocurrency which has led its growth and development. In fact, blockchain has been hardly used in areas other than cryptocurrency. Therefore, most blockchain-related legal policy studies handle cryptocurrency-related issues.
The IoT and blockchain technologies lead network innovation which is the basis of the Fourth Industrial Revolution in terms of network expansion and encryption. Therefore, there is a necessity to search for a criminal justice response plan. First of all, regarding the IoT, it is required to improve criminal laws in consideration of technological development. Under current laws, the privacy of a resident who experiences an information communications network intrusion is not properly protected in terms of legal benefits. In the past, people’s privacy was protected spontaneously when they closed the door and went into their house. However, today’s technology development has diversified ways to penetrate into other people’s personal spaces. As a result, there has been a strong request for legislative policies for privacy protection. Because an information and communications network intrusion is punished under current laws, there might be some objections against a necessity of criminal policies for the benefits and protection of laws regarding privacy. However, regulations on such information and communications network intrusion have character of administrative criminal law to secure stability of the network. In fact, the victims of privacy invasion are not directly targeted for protection. Therefore, they are not enough as criminal legislation which protects privacy and freedom. Therefore, ‘privacy protection from a technical means’ should be considered directly in terms of the benefits and protection of the criminal law.
Furthermore, under current crime of arson-related laws, ‘setting the fire’ is interpreted as ‘an act to burn a target object’. However, there is an issue of if such crime of arson can be punished under current laws when a fire occurs due to overheating during the IoT operation. If it is subsumed, such interpretation could be against ‘void for vagueness’ under the principle of ‘nullum crimen, nulla poena sine lege’. Considering the absence of punishment due to the unavailability of laws on new issues which took place as computer became popular, it is not easy to conclude that such crime of arson using the IoT can be punished with teleological interpretation. In awareness of this kind of problem, there have been suggestions that ‘setting the fire’ should be rephrased into ‘setting the fire directly, using a tool or via communication’. In this case, however, as a means such as a tool and communication is specified, there is a possibility that diverse types of arson acts may not be subsumed. Therefore, rephrasing ‘setting the fire’ into ‘starting a fire’ can be an option. Furthermore, arson using the IoT can be committed in the distance with a criminal’s safety secured and cause huge damage using the expansible means (the Internet) so that the enactment of separate clauses can also be considered.
Then, the meaning of the criminal use of cryptocurrency from the perspective of criminal law should be analyzed. A court has denied the monetary aspect of cryptocurrency such as Bitcoin. Since cryptocurrency exists in a digital format, it doesn’t belong to an object in the civil law or property in the criminal law. Even so, it has property values and is traded in reality so that it can be appraised as property right/benefit or value under criminal and civil laws. Under the civil law, cryptocurrency can be an object of bonds and tradable in exchanges. Therefore, it can be assessed with certain property values or profits under the criminal law as well. Hence, cryptocurrency can be an object of ‘enrichment crime’ under the criminal law.
Meanwhile, cryptocurrency robbing in an electronic manner is understood as a transfer of funds in an electronic fashion, using computer. Therefore, it can be viewed as fraud by use of computer under the criminal law, not theft. However, there are difficulties in subsuming market manipulation by exchanges as an element of crime under the criminal law. Considering the characteristics of cryptocurrency transactions and exchanges, however, relatively small-scale collusion can cause a big chaos on the market. Therefore, it is required to set provisions on the prohibition and punishment of market abuse such as manipulation and use of material nonpublic information. Furthermore, using multiple users’ accounts during market manipulation through collusion can be controlled and punished in accordance with the Act on Promotion of Information and Communication Network Utilization and Information Protection. To further clarify the illegality of such wrongdoing, however, the related rules should be added to the laws on the issuance and transaction of cryptocurrency.
In May 2018, the Supreme Court ruled that Bitcoin could be confiscated from criminals who obtained the cryptocurrency as a consideration of any criminal act. However, it is hard to conclude that the Supreme Court’s decision that Bitcoin can be confiscated under current circumstances that very diverse types of cryptocurrencies are being developed is the complete acceptance of the issuance and transaction of cryptocurrency. However, such ruling can be understood as a sign that there should be legal regulations on the issuance and transaction of cryptocurrency in that its existence and property values have been accepted. In terms of the code of criminal procedure, furthermore, concerning practical cryptocurrency confiscation procedures & methods and confiscated cryptocurrency disposition procedures & rules, legislative assignments are given to researchers and legislators.
Therefore, this study proposes cryptocurrency confiscation and disposition procedures as follows: In terms of confiscation procedures and methods for general objects, they are confiscated in accordance with the Criminal Procedure Act. In other words, the cryptocurrencies confiscated with seizure warrant or voluntary evidence submission and kept by an criminal investigation agency are converted into confiscated articles according to the court’s ruling. Unless confiscated yet, they are confiscated by the court’s decision. Therefore, cryptocurrency confiscation procedures refer to a discussion on the procedures and methods to confiscate cryptocurrencies. To confiscate cryptocurrencies in a way of account creation and transfer, it is needed to create an account under the name of a court of justice or criminal investigation agency and establish the management procedures. The court’s or criminal investigation agency’s account and wallet should be kept secure and safe from hacking or a cryptocurrency exchange’s insolvency. The transfer process and transfer fee-handling regulations shall be recorded and ed, and the maintenance procedures should be developed. Even though a cryptocurrency account is created by a court or criminal investigation agency, and the related management procedures are ready, there is no proper means to confiscate cryptocurrencies by force unless they are submitted by the suspect or the accused voluntarily. In this case, an indirect method based on the effects of a search and seizure warrant is the only option. The effect extent of the search and seizure warrant should include the suspect’s or the accused’s personal records(e.g., PC, mobile phone, memo, etc.). Based on the acquired information, then, the court or criminal investigation agency needs to find the information needed for cryptocurrency transactions.
Regarding the disposition of confiscated cryptocurrencies as well, no clear procedures are available yet. In case cryptocurrency is viewed as a ‘marketable object’, the confiscated cryptocurrency should be converted into fiat currency through public sales and reverted to the national treasury. If the confiscated cryptocurrencies are recognized as ‘marketable securities’, on the contrary, they would be reverted to the national treasury. With active consideration of legal policies which do not accept the issuance and transaction of cryptocurrencies, they might be just destroyed. However, because blockchain cannot be altered or destroyed once created, whether or not it is possible to destroy cryptocurrency is uncertain. Since it’s been legally accepted that cryptocurrency is an object of confiscation and actually confiscated and disposed of, it is valid to admit it as a marketable object and revert it to the national treasury through public sales. For this, institutional improvement should follow.
In an era of network innovation, the Criminal Proceedings Act should be improved according to the cyber and Internet environments. Most crimes take place in cyber spaces such as darknet. The clue or evidence of crime is also found in a networked cyber space or electronic & telecommunication devices. Therefore, it is needed to investigate such network and cyber spaces in person. For this, online search or network investigative technique(NIT) should be adopted. Furthermore, it is essential to verify the qualification for access to such cyber spaces and investigation on the darknet. If it requires an act to process and prove certain identity in addition to nondisclosure of an investigator’s identity, a part of entrapment or illegal secret investigation, not generally allowed voluntary investigation, could be assessed. Therefore, there should be legal grounds on this issue, and it is needed to introduce a secret investigator system according to the code of criminal procedure. In addition, the fact that the current Criminal Procedure Act is based on a paper-type physical warrant system, and its issuance and presentation regulations are strictly interpreted has been a problem. There should be a measure to keep the lawful and accurate execution of warrants ‘legitimacy of proceedings’ undamaged and improvement of the Criminal Procedure Act which ensures warrant issuance and presentation in a digital fashion.
From criminal policy aspects, cyber security criteria should be reestablished in advance. I t is also required to search for a way to utilize the IoT or blockchain criminal policies. In the IoT, for example, there is a necessity to implement a system which connects devices on a network and makes data transmitted automatically to promote the use of police cam and others. Furthermore, the basis laws which regulate the system operation should be improved. In addition, data protection impact assessment(DPIA) on the IoT should be requested. It is also needed to improve educational programs and introduce a specialized court to enhance the efficiency and expertise of investigation and court decision. At present, regarding cryptocurrency such as Bitcoin, various questions have been raised concerning the criminal laws. In fact, there has been a problem of how to handle criminal proceedings such as investigation and trial. Therefore, it is required to establish legal grounds, investigate the legal definitions of cryptocurrency and reflect its characteristics and wait until they are legislated. Recently, however, cryptocurrency-related crimes have occurred more frequently. Under these circumstances, it is needed to prevent chaos resulting from the absence of the related laws. For this, a useful guide should be provided to law enforcement officers.
Recently, the news on Google’s quantum computer made cryptocurrencies such as Bitcoin collapse because it could disable encryption itself. Even if some experts don’t agree with this article, once quantum computer is realized, current object connectivity or encryption could be like ‘ENIAC’, the world’s first electronic computer which was as large as a house. It was released in 1939, and the first Internet network ‘ARPANET’ was constructed in 1969. In 1973, a cellular system-based mobile phone was developed by Dr. Martin Cooper’s Team from MOTOROLA in the U.S. Then, Apple’s iPhone was first introduced to the world in 2007, and in nearly 10 years, the world has changed. Furthermore, such technological advances have changed crime patterns and asked for criminal justice responses. The IoT and blockchain are not future technologies anymore. No one knows what other cutting-edge technologies could come through technology development. However, it is anticipated that this report which discussed the two different technologies would make a contribution to the improvement of criminal justice systems and develop national criminal policies more quickly.