South Korea’s Supreme Court docket has issued its first ruling, establishing that Bitcoin held on home exchanges reminiscent of Upbit and Bithumb might be legally seized beneath the Felony Process Act, in line with an area report from The Chosun Each day.
The December 11 resolution resolves years of authorized ambiguity round whether or not cryptocurrencies saved on buying and selling platforms represent seizable property throughout felony 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 getting ready expanded asset seizure powers.
Authorized consultants say the precedent clarifies the standing of digital property in felony instances and can information future investigations involving digital currencies.
In response to The Chosun Ilbo, South Korea’s Supreme Court docket of Korea has dominated for the primary time that bitcoins held on exchanges reminiscent of Upbit and Bithumb are topic to seizure beneath the Felony Process Act, as they represent electronically recorded property with financial worth…
— Wu Blockchain (@WuBlockchain) January 9, 2026
Court docket Confirms Bitcoin Meets Seizure Requirements Beneath Felony Regulation
The case originated in January 2020, when police confiscated 55.6 Bitcoin, valued at roughly 600 million gained, from a person beneath 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 beneath Article 106 of the Felony Process Act, which limits seizures to proof or gadgets “acknowledged as associated to the case.”
After the Seoul Central District Court docket upheld the seizure as lawful, the Supreme Court docket’s Second Division, led by Justice Kwon Younger-jun, affirmed that ruling on enchantment.
The courtroom said that seizure targets beneath the Felony Process Act embody each tangible objects and digital info, with Bitcoin qualifying as “an digital token with the flexibility to be independently managed, traded, and considerably managed when it comes to financial worth.“
The justices famous that Bitcoin administration and buying and selling inside exchanges might be virtually managed by holders via personal keys saved in digital wallets, establishing adequate management to fulfill seizure necessities.
The choice builds on the Supreme Court docket’s 2018 ruling that categorised Bitcoin as intangible property with financial worth topic to state confiscation, and its 2021 judgment recognizing digital property as property pursuits in fraud instances.
Ruling Arrives as Regulators Broaden Seizure Authority
The Supreme Court docket’s clarification coincides with proposals from the Monetary Providers Fee to implement a fee freeze system that may enable authorities to lock crypto accounts earlier than suspected felony proceeds are withdrawn.
Officers advised native media in November that present guidelines require courtroom warrants throughout the prosecution section, 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 beneath the April 2025 amendments to the Capital Markets Act.
South Korea might introduce preemptive crypto account freezes to forestall worth manipulation and illicit features. #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 go away regulated platforms.
South Korea’s Digital Asset Person Safety Act, which took impact in July 2024, strengthened change obligations to observe suspicious exercise however didn’t grant preemptive asset freeze powers.
A second legislative section addressing stablecoins, market abuse, and enforcement gaps stays stalled in 2026 because the Monetary Providers Fee and Financial institution of Korea dispute whether or not stablecoin issuers ought to be bank-led consortia.
Past buying and selling enforcement, authorities are tightening compliance throughout exchanges.
The Monetary Intelligence Unit imposed a 27.3 billion gained advantageous on Korbit in December following 22,000 anti-money laundering violations, after earlier sanctions towards Upbit totaling 35.2 billion gained.
South Korea’s Monetary 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 beneath assessment, with whole sector fines anticipated to achieve a whole bunch of billions of gained.
A lawyer skilled in digital asset litigation advised The Chosun Each day 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 Change chairman Jeong Eun-bo introduced plans earlier this month to launch crypto ETFs and lengthen buying and selling hours to 24/7 operations, whereas the federal government additionally lately abolished a seven-year enterprise capital funding ban for crypto corporations.
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