South Korea’s Supreme Court has ruled that Bitcoin held on centralized exchanges qualifies as seizable property under criminal law, marking a pivotal clarification in the nation’s cryptocurrency regulations. This decision, stemming from a 2020 money laundering case, affirms law enforcement’s authority to confiscate digital assets during investigations.
Ruling Details
The Supreme Court upheld the seizure of 55.6 Bitcoin—valued at around 600 million Korean won at the time—from an exchange account linked to a suspect identified as Mr. A. The court rejected the suspect’s appeal, stating that seizure provisions extend beyond physical items to include electronic information with economic value, independent manageability, and transferability. Judges emphasized that users retain effective control over exchange-held Bitcoin via account access and private keys, distinguishing it from mere platform custody.
This precedent aligns with prior rulings: in 2018, Bitcoin was deemed intangible property subject to confiscation in criminal cases and divisible in divorce proceedings; by 2021, courts classified it explicitly as a property interest under criminal law.
Case Background
The dispute originated in January 2020 when police targeted a money laundering probe, securing the Bitcoin from a major exchange like Upbit or Bithumb. Lower courts approved the action, but the Supreme Court finalized it on December 11, 2025, publishing details in early January 2026 via outlets like Chosun Ilbo. The ruling resolves debates over whether exchange-held crypto evades traditional seizure laws, given its digital nature.
Regulatory Context
South Korea, home to over 16 million crypto account holders—about one-third of its population—boasts high adoption rates as of March 2025. The nation enforces strict measures, including real-name trading and anti-money laundering (AML) compliance, amid past outflows of over $110 billion to foreign exchanges due to domestic restrictions. This decision bolsters investigators amid rising financial crime cases involving virtual assets.
Experts note it mirrors global trends, such as UK courts recognizing crypto as property and U.S./EU enforcement practices.
Industry Impact
Exchanges may enhance compliance monitoring to mitigate risks, though user protections for legitimate holdings remain unchanged. The ruling could streamline financial crime trials by curbing disputes over asset eligibility, serving as a benchmark for future cases. It arrives amid speculation on Bitcoin ETF approvals, potentially influencing risk assessments for “risk-on” assets.
Legal scholars predict reduced uncertainty will aid regulators in a market where crypto integrates deeply into finance.
Broader Implications
This solidifies cryptocurrencies’ legal status beyond gray zones, treating them as enforceable assets akin to stocks or cash equivalents. For South Korea’s AML framework, it equips authorities against laundering via exchanges, aligning with international standards. Investors face clearer accountability, while decentralized wallets may see comparative scrutiny in future rulings.