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South Korea’s Supreme Court has issued its first explicit ruling that Bitcoin held on centralized exchanges can be seized by law enforcement, signaling a significant shift in how exchange-custodied crypto is treated under criminal law.
In a decision dated Dec. 11, 2025, and published in the court’s official bulletin, the court upheld the seizure of 55.6 Bitcoin (BTC) held in a suspect’s account on a domestic crypto exchange as part of a money-laundering investigation.
The court ruled that Bitcoin qualifies as an “object of seizure” under the Criminal Procedure Act, describing it as electronic information with independent manageability, tradability, and economic value.
While earlier Supreme Court rulings had already recognized Bitcoin as confiscable criminal proceeds and as a “property interest” capable of being the subject of fraud, the latest decision goes further by directly addressing assets held in custodial exchange wallets. The ruling establishes an important precedent for future investigations and legislation involving digital assets.
The ruling clarifies the legal risks for Korean users who hold Bitcoin on centralized platforms such as Upbit and Bithumb. Crypto assets linked to alleged criminal activity can now be frozen and seized directly at the exchange level, placing greater pressure on platforms to respond swiftly to warrants and to maintain robust Know Your Customer (KYC) procedures and transaction-tracing systems.
Ruling aligns with global crypto-seizure practices
South Korea’s approach broadly mirrors that of the United States and the European Union, where authorities already rely on seizure and forfeiture mechanisms to take control of Bitcoin and other cryptocurrencies held by centralized intermediaries in criminal investigations.
The Supreme Court’s decision also comes as regulators consider expanding their administrative powers. The Financial Services Commission is reviewing a proposal that would allow pre-emptive freezes of crypto accounts suspected of market manipulation—similar to existing measures in equity markets. Under the proposal, authorities could block withdrawals and transfers before a court order if they detect practices such as wash trading or pre-programmed pump-and-dump schemes.
At the same time, the government is preparing so-called “Phase-2” digital asset legislation under its 2026 Economic Growth Strategy. Planned measures include an authorization and reserve framework for stablecoin issuers, rules governing cross-border stablecoin transfers, and steps toward introducing spot digital-asset exchange-traded funds to broaden market access.
