South Korea’s Supreme Court has confirmed that Bitcoin held on local exchanges can be treated as property and seized in criminal cases, setting an important precedent for future investigations and crypto rules.
Judges Say Bitcoin Qualifies as Property That Can Be Seized
In a ruling delivered on December 11 last year, the court’s Second Division rejected a second appeal by a defendant identified as “Mr A,” who had challenged the seizure of Bitcoin linked to a money laundering probe. Police had seized 55.6 Bitcoin, worth about 600 million won at the time, from his account at a virtual asset exchange in January 2020.
“Mr A” argued that Bitcoin held in an exchange account was not a physical object and therefore fell outside the scope of seizure under the Criminal Procedure Act, but a lower court dismissed his motion, finding the seizure lawful, pushing him to take the case to the Supreme Court.
According to a report by Chosun, the Supreme Court said that the Criminal Procedure Act allows seizure of both physical items and digital data. They concluded that Bitcoin fits this category because it is an electronic token that can be owned, traded, and controlled as an asset, so courts and investigators can seize it.
It also stressed that Bitcoin held on an exchange is effectively under the user’s control through a private key stored in an electronic wallet, meaning it counts as property the user actually controls and can therefore be lawfully frozen and seized in a criminal case.
Ruling Builds on Earlier Virtual Asset Decisions
The court confirmed that the seizure of Bitcoin managed under Mr A’s name by a virtual asset exchange was lawful and upheld the lower court’s decision.
In 2018, the court held that Bitcoin is intangible property with economic value that can be confiscated by the state if obtained through crime, and in 2021, it said Bitcoin is a virtual asset that embodies economic value in digital form and constitutes a property interest that can be the object of fraud.
Decision Raises Stakes for South Korea’s Crypto Industry
The ruling is expected to increase legal and compliance pressure on local exchanges and investors, as prosecutors now have a clear basis to freeze and seize coins suspected of being linked to crime, and while the decision does not ban trading or holding Bitcoin, experts say it is likely to lead to more aggressive asset seizures in investigations and force platforms to tighten monitoring and reporting, a shift that some market participants fear could cool parts of South Korea’s crypto market.
