South Korea’s Supreme Court has issued the first clear ruling that bitcoins held on centralized exchanges can be seized by investigators, marking a notable change in the criminal law treatment of cryptocurrencies held on exchanges.
In a December 11, 2025 judgment published through the court’s official gazette, the court upheld the seizure of 55.6 Bitcoin (BTC) held in a South Korean exchange account by a suspect during a money laundering investigation.
Because Bitcoin is electronic information that has independent manageability, tradability, and economic value, it is subject to seizure under the Criminal Procedure Code.
The ruling builds on previous Supreme Court precedent that recognized Bitcoin as forfeitable proceeds of crime and a “property right” that can be subject to fraud, but goes further by addressing assets held in exchange custodial wallets head-on, setting a precedent for future investigations and legislation related to digital assets.
The decision means Korean users holding BTC on platforms such as Upbit and Bithumb will be exposed to clearer legal enforcement. Coins associated with criminal charges could be frozen and seized directly at the venue, putting exchanges under greater pressure to quickly comply with warrants and maintain robust know-your-customer (KYC) and tracking systems.
Related: Bitcoin ETFs gain momentum in South Korea as regulations lag
Judgment is consistent with global crypto asset seizure practices
This trajectory is broadly consistent with practice in the United States and the European Union, where authorities already use seizure and forfeiture tools to control Bitcoin and other virtual currencies held by centralized intermediaries in criminal cases.
The Supreme Court’s move comes as financial regulators consider taking further administrative steps.
The South Korean Financial Services Commission is considering a proposal that would allow pre-emptive freezing of virtual currency accounts suspected of market manipulation, similar to existing measures in the stock market. This would allow authorities to block withdrawals or transfers before a court order if they detect tactics such as wash trading or pre-programmed pump-and-dumps.
At the same time, the government is preparing a “second phase” digital asset bill based on its 2026 Economic Growth Strategy, which includes a stablecoin issuer licensing system and reserve requirements, a framework for cross-border stablecoin remittances, and a plan to introduce a spot digital asset ETF to improve market access.
