South Korea’s Top Court Rules Bitcoin on Exchanges Can Be Seized
South Korea’s Supreme Court has issued its first ruling, establishing that Bitcoin held on home exchanges akin to Upbit and Bithumb could be legally seized below the Criminal Procedure Act, in accordance with an area report from The Chosun Daily.
The December 11 choice resolves years of authorized ambiguity round whether or not cryptocurrencies saved on buying and selling platforms represent seizable property throughout prison investigations.
The ruling comes as South Korean authorities speed up enforcement throughout the crypto sector, imposing billions of gained in fines on main exchanges whereas making ready expanded asset seizure powers.
Legal consultants say the precedent clarifies the standing of digital property in prison instances and can information future investigations involving digital currencies.
Court Confirms Bitcoin Meets Seizure Standards Under Criminal Law
The case originated in January 2020, when police confiscated 55.6 Bitcoin, valued at roughly 600 million gained, from a person below investigation for cash laundering.
The suspect challenged the seizure, arguing that Bitcoin held in change accounts didn’t qualify as bodily property topic to confiscation below Article 106 of the Criminal Procedure Act, which limits seizures to proof or objects “acknowledged as associated to the case.”
After the Seoul Central District Court upheld the seizure as lawful, the Supreme Court’s Second Division, led by Justice Kwon Young-jun, affirmed that ruling on enchantment.
The courtroom acknowledged that seizure targets below the Criminal Procedure Act embody each tangible objects and digital data, with Bitcoin qualifying as “an digital token with the flexibility to be independently managed, traded, and considerably managed by way of financial worth.“
The justices famous that Bitcoin administration and buying and selling inside exchanges could be virtually managed by holders by personal keys saved in digital wallets, establishing enough management to fulfill seizure necessities.
The choice builds on the Supreme Court’s 2018 ruling that labeled Bitcoin as intangible property with financial worth topic to state confiscation, and its 2021 judgment recognizing digital property as property pursuits in fraud instances.
The Supreme Court’s clarification coincides with proposals from the Financial Services Commission to implement a payment freeze system that may enable authorities to lock crypto accounts earlier than suspected prison proceeds are withdrawn.
Officials instructed native media in November that present guidelines require courtroom warrants throughout the prosecution part, creating delays that enable suspects to maneuver funds into personal wallets or abroad platforms past regulatory attain.
The proposed mechanism would mirror inventory market controls launched below the April 2025 amendments to the Capital Markets Act.
South Korea might introduce preemptive crypto account freezes to stop value manipulation and illicit beneficial properties. #SouthKorea #MarketManipulationhttps://t.co/WS9qDxcOd2
— Cryptonews.com (@cryptonews) January 6, 2026
In September, regulators froze 75 accounts linked to a 100 billion gained inventory manipulation scheme, stopping withdrawal of 40 billion gained in realized and unrealized income.
FSC members cited that case as proof that the strategy might work in crypto markets, the place property are even simpler to hide as soon as they depart regulated platforms.
South Korea’s Virtual Asset User Protection Act, which took impact in July 2024, strengthened change obligations to watch suspicious exercise however didn’t grant preemptive asset freeze powers.
A second legislative part addressing stablecoins, market abuse, and enforcement gaps remains stalled in 2026 as the Financial Services Commission and Bank of Korea dispute whether or not stablecoin issuers ought to be bank-led consortia.
Beyond buying and selling enforcement, authorities are tightening compliance throughout exchanges.
The Financial Intelligence Unit imposed a 27.3 billion won fine on Korbit in December following 22,000 anti-money laundering violations, after earlier sanctions in opposition to Upbit totaling 35.2 billion gained.
South Korea’s Financial Intelligence Unit fines crypto change Korbit $1.89M over violations.#Crypto #Regulation https://t.co/fqGj3jWHWF
— Cryptonews.com (@cryptonews) December 31, 2025
Bithumb, Coinone, and GOPAX stay below evaluate, with whole sector fines anticipated to achieve a whole lot of billions of gained.
A lawyer skilled in digital asset litigation instructed The Chosun Daily the ruling “clarifies the authorized nature of cash saved and traded on digital asset exchanges and specifies that they are often lawfully seized throughout investigations,” including that it ought to “resolve sensible controversies and doubts associated to seizure searches of exchanges.“
Amid all these, South Korea has concurrently superior initiatives to legitimize crypto markets.
Korea Exchange chairman Jeong Eun-bo announced plans earlier this month to launch crypto ETFs and prolong buying and selling hours to 24/7 operations, whereas the federal government additionally not too long ago abolished a seven-year enterprise capital funding ban for crypto corporations.
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