South Korea Supreme Court Affirms Legal Seizure of Bitcoin on Exchanges

South Korea’s Supreme Court has affirmed that Bitcoin held on cryptocurrency exchanges can be legally seized under the country’s Criminal Procedure Act according to a court ruling. The ruling, first reported by Chosun Daily, resolves a legal dispute brought by a suspect in a money laundering investigation as reported. The court determined that digital assets on exchanges qualify as seizure targets, even though they are not physical objects as stated in the decision.

The decision stems from a case in which police seized 55.6 Bitcoin from an individual’s exchange account in 2020. At that time, the assets were valued at about 600 million Korean won ($413,000). The suspect, identified as Mr. A, argued that Bitcoin could not be considered a “physical object” under Article 106 of the Criminal Procedure Act, which allows the seizure of assets linked to criminal investigations as per the court's analysis.

The Supreme Court dismissed Mr. A’s appeal, ruling that Bitcoin qualifies as an electronic token with economic value and can be seized by authorities according to the court's decision. The court emphasized that seizure targets under the law include both tangible objects and electronic information as noted in the ruling. The ruling affirms the legality of the police action and aligns with previous South Korean court decisions that have treated cryptocurrencies as property according to legal analysis.

Why Did This Happen?

South Korea’s high rate of cryptocurrency adoption provides context for the court’s decision. As of March 2025, more than 16 million South Koreans held crypto accounts at major domestic exchanges. The regulatory environment has evolved to include courts recognizing Bitcoin as an intangible asset since 2018. The 2021 clarification by the Supreme Court further reinforced the view that Bitcoin is a virtual asset with economic value as confirmed by legal documents.

The legal recognition of Bitcoin as a property interest has implications for criminal investigations. Authorities can now act more confidently in seizing digital assets as part of money laundering or other criminal cases according to enforcement reports. The court’s decision also reflects a broader trend toward treating digital assets as property for legal and enforcement purposes as observed in global trends.

What Are Analysts Watching Next?

Other jurisdictions have taken similar approaches to classifying digital assets. The UK passed legislation in late 2025 formally recognizing crypto as property, granting it the same legal status as traditional assets according to regulatory updates. This move was praised by legal experts as a “welcome and timely statutory recognition of the fundamental property quality in crypto assets”.

The South Korean ruling could influence future regulatory developments in the country. The Financial Services Commission (FSC) has been reviewing measures to align crypto oversight with traditional finance, including tools to freeze accounts suspected of market manipulation. These steps suggest a continued focus on strengthening enforcement and investor protection in digital asset markets.

Investors and market participants should also monitor the implications of the ruling for crypto trading and asset management. South Koreans have increasingly moved funds to foreign exchanges due to domestic regulatory restrictions. The delay in implementing the Digital Asset Basic Act (DABA) has created a regulatory gap, pushing investors to offshore platforms offering more complex products.

What Comes Next?

The Supreme Court’s decision reinforces the legal framework for handling digital assets in criminal and civil cases. It also aligns with broader global trends toward treating crypto as a legitimate asset class. As more jurisdictions formalize legal recognition of crypto, enforcement clarity and investor confidence may continue to improve.

The ruling does not resolve all regulatory challenges in South Korea. The FSC and other agencies continue to work on frameworks for stablecoins and market abuse controls. Meanwhile, the high volume of crypto outflows to foreign platforms suggests that regulatory gaps may still affect investor behavior.

The evolving legal and regulatory environment for digital assets will likely shape South Korea’s role in the global crypto market. Investors and businesses must stay informed as new rules and court decisions continue to define the landscape.