South Korea’s Supreme Court handed down its first explicit ruling that Bitcoin held in centralized exchanges can be seized by investigators, marking a notable shift in how exchange‑custodied crypto is treated under criminal law.
In a decision on Dec. 11, 2025, and disclosed via the court’s official bulletin, the court upheld the seizure of 55.6 Bitcoin (BTC) held in a Korean exchange account by a suspect under a money laundering investigation.
Bitcoin is now an “object of seizure” under the Criminal Procedure Act because it is electronic information with independent manageability, tradability and economic value.
The ruling builds on earlier Supreme Court precedents that recognized Bitcoin as confiscable criminal proceeds and as a “property interest” capable of being the object of fraud, but goes further by squarely addressing assets stored in exchange custodial wallets, setting a precedent for future investigations and legislation involving digital assets.
The decision means Korean users who keep BTC on platforms like Upbit and Bithumb now face clearer legal exposure. Coins linked to alleged crimes can be frozen and seized directly at the venue, and exchanges will come under stronger pressure to comply swiftly with warrants and maintain robust Know Your Customer (KYC) and tracing systems.
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Ruling aligns with global crypto‑seizure practice
This trajectory is broadly in line with practices in the United States and European Union, where authorities already use seizure and forfeiture tools to take control of Bitcoin and other crypto held with centralized intermediaries in criminal cases.
The Supreme Court’s move also comes as financial regulators consider going a step further on the administrative side.
The South Korean Financial Services Commission is reviewing a proposal to allow pre‑emptive freezes of crypto accounts suspected of market manipulation, similar to existing measures in the stock market, which would let authorities block withdrawals and 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 “Phase‑2” digital asset legislation under its 2026 Economic Growth Strategy, including an authorization regime and reserve rules for stablecoin issuers, a framework for cross‑border stablecoin transfers and a plan to introduce spot digital asset exchange-traded funds to improve market access.
