South Korea Supreme Court Rules Bitcoin on Exchanges Can Be Seized

South Korea’s Supreme Court has issued a ruling, confirming that Bitcoin held on exchanges can be legally seized under the Criminal Procedure Act. The decision stems from a re-appeal case involving Mr. A, a subject of a money laundering probe, who had 55.6 Bitcoin (BTC) stored on a virtual asset exchange. 

According to a local report, the court confirmed that cryptocurrencies, even though they’re digital, can be seized because they have real economic value. The case started in January 2020 when authorities seized Mr. A’s Bitcoin during a money laundering investigation. He argued that coins kept in exchange accounts aren’t “physical objects” and shouldn’t be subject to seizure. However, both the Seoul Central District Court and the Supreme Court rejected his argument. 

The Supreme Court explained, “Under the Criminal Procedure Act, seizure targets include both tangible objects and electronic information,” and “Bitcoin, as an electronic token with the ability to be independently managed, traded, and substantially controlled in terms of economic value, is a seizure target of courts or investigative agencies.” Experts believe this ruling creates a clear reference for future investigations, court cases, and cryptocurrency laws in South Korea.

Court’s clarification on digital assets

The court emphasized that Bitcoin management within exchanges remains under the holder’s practical control via private keys. Consequently, cryptocurrencies are not merely records; they represent property interests that can be lawfully seized. 

Earlier rulings in 2018 and 2021 had already recognized Bitcoin as property with economic value, subject to seizure if linked to criminal activity. However, this new decision extends that principle specifically to coins stored in exchanges.

“This decision clarifies the legal nature of coins stored and traded on virtual asset exchanges and specifies that they can be lawfully seized during investigations,” a lawyer specializing in virtual assets commented. He added that the ruling would help resolve practical controversies surrounding exchange-related seizures.

Broader regulatory context

Besides the court ruling, South Korea is advancing the “Phase Two Virtual Asset Law,” which seeks to cap ownership concentration in major crypto exchanges. The Financial Services Commission (FSC) proposed classifying exchanges with over 11 million users as “core infrastructure” within the virtual asset market. 

The proposal also recommends limiting major shareholders’ stakes to 15–20% and introducing qualification reviews similar to those applied to Alternative Trading Systems under capital markets law.

Last month, South Korea’s Financial Intelligence Unit (FIU) also hit Korbit with a fine of 2.73 billion KRW ($1.9 million) for breaking anti-money laundering rules. Inspectors found the exchange allowed around 22,000 risky transactions, including accounts with missing or copied ID documents, and didn’t properly re-check high-risk users. 

The FIU further issued warnings to the company and its top executives, which is an indication that regulators are keeping a tough watch on crypto exchanges. 

This ruling is a big shift for cryptocurrency rules in South Korea. Now, coins stored on exchanges can be seized in legal cases. At the same time, the government is tightening rules to make sure exchanges don’t stay controlled by just a few people and that they follow the law more closely.

Also Read: Illegal Crypto Activity Hits $154B in 2025, Led by Stablecoin Usage