Key Takeaways:

• South Korea’s Supreme Court ruled crypto assets on exchanges can be seized in criminal cases.
• Nearly 16 million Koreans, about 1/3rd of the population, hold crypto accounts, amplifying the ruling’s impact.
• The decision backs tighter oversight by the Financial Services Commission.

South Korea’s Supreme Court has established a legal precedent allowing authorities to seize Bitcoin stored on cryptocurrency exchanges during criminal investigations. This ends years of uncertainty around whether digital assets held on platforms like Upbit and Bithumb qualify as property that can be confiscated by law enforcement.

The 11 December 2025 ruling, first reported by Chosun Daily, represents South Korea’s first explicit judicial confirmation that cryptocurrencies held in exchange wallets (digital accounts where users store their crypto) are subject to seizure under criminal law. 

The decision holds particular significance in South Korea, where approximately 16 million people, nearly one-third of the population, held cryptocurrency accounts at major domestic exchanges as of March 2025.

Origins of the legal battle

The case traces back to January 2020, when police seized 55.6 Bitcoin valued at approximately 600 million won ($413,000 at that time) from an exchange account during a money laundering investigation. The account holder, identified as Mr. A, contested the seizure, according to court records.

Mr. A’s legal challenge centered on the argument that Bitcoin stored in exchange accounts should not be considered a “physical object” under Article 106 of the Criminal Procedure Act, which traditionally limited seizures to tangible items like cash or documents. 

The Seoul Central District Court rejected this reasoning and upheld the seizure. Mr. A then escalated his appeal to the Supreme Court in December 2025.

The Supreme Court’s Second Division, led by Justice Kwon Young-jun, ultimately dismissed the appeal, affirming that authorities acted lawfully when they seized the Bitcoin.

Court’s legal framework

The Supreme Court clarified that seizure laws extend beyond physical objects, and also cover electronic data.

The judges explained that Bitcoin qualifies as “An electronic token that can be autonomously managed, traded, and significantly controlled in terms of its economic worth,” making it a legitimate target for seizure by courts and investigative agencies.

The court emphasized that users retain practical control over their Bitcoin through private keys even when those assets are held on exchanges. This control mechanism establishes the legal foundation for treating Bitcoin as a seizable property.

The ruling aligns with earlier Supreme Court decisions. In 2018, the court recognized Bitcoin as intangible property with economic value that could be confiscated if obtained illegally. In 2021, it classified virtual assets as property interests in fraud cases, according to legal records.

Regulatory implications

A Korean legal expert specializing in virtual assets underscored that the ruling “clarifies the legal status of crypto held and exchanged on platforms.”

The decision arrives amid escalating regulatory enforcement. South Korea’s Financial Intelligence Unit imposed a 2.73 billion won ($1.9 million) fine on the crypto exchange Korbit on 31 December, 2025, for anti-money laundering (AML) violations, while Upbit previously received fines totaling 35.2 billion won ($24 million) earlier on 6 November, 2025.

South Korea’s Financial Services Commission (FSC) is also considering rules to pre-emptively freeze crypto accounts suspected of market manipulation, allowing authorities to block transfers and withdrawals before a court order when activities like wash trading or automated pump-and-dump schemes are detected.