Supreme Court Decision Expands Crypto Seizure Powers in South Korea

• The South Korean Supreme Court ruled that Bitcoin on centralized cryptocurrency exchanges is subject to seizure under the Criminal Procedure Act.
• This means that digital assets that are maintained in exchange accounts can be seen as seizable property by the criminal justice system.

South Korean Supreme Court makes historic ruling on Bitcoin seizure, ruling that Bitcoins in accounts on Korean cryptocurrency exchanges are subject to seizure under the Criminal Procedure Act, finally putting an end to questions about the treatment of cryptocurrency in criminal prosecutions after many years of legal limbo. The decision, dated December 11, 2025, and publicly announced at the beginning of 2026, is an outcome of a dispute originating from the seizure of 55.6 Bitcoin belonging to an individual from an account on a local Korean trading platform during the police investigation into a charge for money laundering. The defense’s appeal, raised on the proposition that Bitcoin is intangible and not subject to seizure as property, has been dismissed by the Supreme Court.

In its ruling, the court explained that the scope of ‘seizable property,’ as defined under the Criminal Procedure Act, was not only limited to physical objects but also electronic data and other assets of economic value. The court found that since Bitcoin qualifies as an electronic token that could be ‘independently managed, traded, and economically controlled,’ it qualifies for seizure as part of criminal procedures.

Justices Kwon Young-jun and his fellow judges confirmed that digital assets stored in custodial cryptocurrencies like Upbit and Bithumb exchange wallets are legitimate for confiscation under the law when the requisites for legal confiscation are fulfilled. Such an interpretation maintains the criminal law status accorded to virtual assets under the law in South Korea, which were already deemed to be non-tangible property with economic value by the courts.

Implications for Enforcement and Exchange Compliance Research

It is expected that the Supreme Court decision will reinforce the powers of the prosecution in pursuing the crypto assets in criminal cases, especially money laundering, fraud, or any other crime in which the use of cryptos is employed to conceal illicit financial gains. With the removal of this major controversy that generates challenges in any kind of enforcement action, the ruling allows all custodial exchange assets to be covered by the Criminal Procedure Act.

Legal experts have observed that this is not out of line with the wider regulatory framework operating in South Korea. The country has received growing attention in relation to its cryptocurrency industry over the past year or so and has imposed substantial penalties on some major exchanges for anti-money laundering contraventions.

Although the ruling did not affect any standard on protecting users engaging in legal activities, it might motivate exchanges to improve those measures involving cooperation with law enforcement services as soon as possible. Enhanced cooperation with law enforcement services would require exchanges to upgrade their respective measures involving cooperation with law enforcement services as soon as possible.

The Supreme Court ruling is a significant step in the legal development of virtual assets in Korean law, as it clarifies that Bitcoin owned through exchanges is seizable under criminal law. The court’s ruling that exchange-held Bitcoin qualifies as qualifying property under the Criminal Procedure Act should go a long way towards providing further clarification for law enforcement authorities when dealing with virtual assets going forward. How this precedent falls within the constantly evolving virtual environment is likely to play an important part in shaping enforcement procedures within the crypto environment in South Korea.

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