South Korea's Supreme Court rules: Bitcoins held by exchanges can be legally seized

Source: PortaldoBitcoin Original Title: Bitcoins in exchanges can be seized, rules South Korea’s Supreme Court Original Link:

Background

South Korea’s Supreme Court has ruled that bitcoins stored in cryptocurrency exchanges can be seized under the country’s Criminal Procedure Act, ending a lawsuit filed by a suspect in a money laundering investigation.

The decision was initially reported by Chosun Ilbo, confirming that digital assets stored in exchanges meet the criteria for seizure during criminal investigations, even if these assets do not physically exist.

Case Details

South Korea is one of the countries with the highest cryptocurrency holdings worldwide. As of March 2025, over 16 million people—about one-third of the population—had cryptocurrency accounts on major exchanges in the country.

The case originated from police seizing 55.6 bitcoins, valued at approximately 600 million won (about $41.3 million) at the time, assets belonging to an account of Mr. A at a certain exchange. These assets were seized as part of a money laundering investigation.

Mr. A subsequently filed a reconsideration request, arguing that bitcoins stored in exchange accounts cannot be seized because they do not meet the definition of “tangible objects” under Article 106 of the Criminal Procedure Act. This article allows authorities to seize evidence or confiscate items related to criminal cases.

The Seoul Central District Court dismissed the request, ruling that the seizure was lawful. Mr. A then filed a new appeal to the Supreme Court in December.

Supreme Court Ruling

In its final judgment, the Supreme Court rejected the argument that bitcoins are outside the scope of seizure law. The court stated: “According to the Criminal Procedure Act, objects subject to seizure include both tangible objects and electronic information.”

The court added that bitcoins, as “an electronic token with independent management, trading, and substantial control over economic value,” meet the conditions for assets that can be seized by courts or investigative agencies.

“The decision to seize bitcoins managed by a virtual asset exchange in the name of Mr. A in this case is lawful, and the lower court’s decision to dismiss the reconsideration request was not in error,” the judgment states.

Legal Precedents

This decision aligns with a series of previous judicial rulings in South Korea that recognize cryptocurrencies as property or assets. In 2018, the Supreme Court ruled that bitcoins are intangible assets with economic value and can be confiscated if obtained through criminal activity. The same year, cryptocurrencies were recognized as divisible assets in divorce proceedings.

In 2021, the court further clarified that bitcoins constitute virtual assets with economic value and are regarded as property rights under criminal law.

Global Trends

Other jurisdictions have adopted similar approaches, classifying digital assets as property for legal and enforcement purposes.

Last month, the UK passed legislation recognizing digital assets as property, granting them the same legal status as traditional property forms. The law aims to provide clearer guidance for courts handling cases involving theft, inheritance, and bankruptcy related to crypto assets.

UK legislation, based on recommendations from the Law Commission of England and Wales, provides legal backing for principles previously developed through common law.

Such measures aim to improve legal clarity and applicability in cases involving digital assets, especially concerning proceeds of crime and asset recovery.