Landmark decision classifies custodial Bitcoin as a legal object of seizure under criminal law
South Korea’s Supreme Court has issued a landmark ruling confirming that Bitcoin held on centralized exchanges can be seized by authorities, marking a major development in the country’s digital asset enforcement framework. The decision brings legal clarity to how exchange-custodied cryptocurrency is treated in criminal investigations.
In a ruling dated Dec. 11, 2025, the court upheld the seizure of 55.6 Bitcoin stored in a domestic exchange account linked to a money laundering investigation. The court determined that Bitcoin qualifies as an “object of seizure” under the Criminal Procedure Act, citing its characteristics as electronic information with independent manageability, tradability, and clear economic value.
This judgment builds on earlier precedents recognizing Bitcoin as confiscable criminal proceeds and a property interest, but it goes further by explicitly addressing assets held in exchange custodial wallets. The ruling sets a binding precedent for future criminal cases involving digital assets.
For exchange users, the decision means Bitcoin held on platforms can be frozen or seized directly, increasing legal exposure for funds tied to alleged crimes. Exchanges are also expected to face greater compliance pressure, including faster warrant execution and strengthened Know Your Customer and transaction-tracking systems.
The ruling aligns South Korea with U.S. and European enforcement practices, where authorities already seize crypto held by centralized intermediaries. It also comes as regulators review pre-emptive account freezes and prepare Phase-2 digital asset legislation under the country’s 2026 Economic Growth Strategy, signaling a tighter regulatory environment ahead.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.