South Korean Supreme Court Rules Bitcoin Held on Exchanges Can Be Seized in Criminal Investigations

South Korean Supreme Court Confirms Bitcoin on Exchanges Can Be Seized

Authorities in South Korea now have a clear legal framework to seize cryptocurrencies stored on exchanges, following a Supreme Court ruling that treated digital assets as seizable property.

The decision arose from a 2020 money laundering case, in which 55.6 Bitcoin, worth around 600 million won ($413,000) at the time, were confiscated from an individual’s account on a domestic exchange.

Why Bitcoin Is Considered Seizable Property

The Supreme Court rejected arguments that Bitcoin’s lack of physical form protects it from seizure.

According to online reports, Justice Kwon Young-jun, Presiding Justice of the Court, said,

“Bitcoin, as an electronic token that can be independently managed, traded, and substantially controlled in terms of economic value, is a seizure target of courts or investigative agencies.”

The ruling clarifies that under the Criminal Procedure Act, authorities can seize electronic assets alongside traditional property, provided they are linked to criminal investigations such as money laundering, fraud, or embezzlement.

The court confirmed that digital assets on exchanges, including platforms like Upbit and Bithumb, fall within the scope of seizure laws.

Impact on Exchanges and Crypto Users

While this decision applies specifically to criminal cases, it significantly broadens the authority of prosecutors and police to freeze and confiscate cryptocurrency.

Regulated exchanges must comply with official requests to transfer or hold assets tied to suspected crimes.

South Korea has one of the highest rates of cryptocurrency ownership in the world.

As of March 2025, more than 16 million people held accounts on domestic exchanges.

On-chain data indicates that South Korean platforms collectively store over $33 billion in digital assets.

The ruling does not put these holdings at risk by default but provides legal clarity for seizure in appropriate cases.

Historical Context and Legal Precedent

The Supreme Court’s decision builds on previous rulings that classified Bitcoin and other cryptocurrencies as property with economic value.

In 2018, the court recognised Bitcoin as intangible property that could be confiscated if linked to criminal activity.

Subsequent rulings in 2018 and 2021 confirmed that digital tokens are divisible assets in civil matters and constitute property under criminal law.

Global Context of Digital Asset Regulation

South Korea’s ruling aligns with international trends treating cryptocurrencies as property.

Last month, the UK passed legislation recognising digital assets as property, providing courts with statutory guidance for cases involving theft, inheritance, and insolvency.

Etay Katz, head of digital assets at law firm Ashurst, commented that the law is “a welcome and timely statutory recognition of the fundamental property quality in crypto assets.”

Could This Encourage Self-Custody

The decision may prompt some investors to reconsider storing crypto on exchanges.

Since the ruling only applies to assets held on regulated platforms, users may increasingly turn to private wallets to retain control and reduce exposure to potential enforcement actions.

With this legal precedent, South Korea has clarified a long-standing uncertainty in its crypto regulations, reinforcing compliance obligations for exchanges while providing authorities with a stronger tool to pursue financial crimes.