A landmark judicial decision has addressed how digital assets interact with criminal procedure. South Korea’s Supreme Court, the nation’s highest judicial body, reportedly issued a ruling, determining that bitcoin held in custodial accounts at crypto exchanges may be seized during criminal investigations.

In its reasoning, the Supreme Court relied on existing statutory definitions and prior precedent to frame virtual assets within criminal law. The court reiterated an earlier position:

Bitcoin is subject to confiscation that can belong to the state.

It further explained that, “according to the Act on Protection of Virtual Asset Users, virtual assets are electronic tokens with economic value that can be traded or transferred electronically, and therefore bitcoin is also included as a subject of seizure by courts or investigative agencies.”

This interpretation directly addressed arguments raised by the re-appellant, who maintained that “ bitcoin in exchange accounts does not constitute ‘objects’ subject to seizure under the Criminal Procedure Act, so the illegal seizure disposition should be canceled.” Lower courts rejected that claim, determining instead that “although virtual assets do not correspond to traditional tangible objects, they constitute ‘objects deemed to be confiscated’ under the Criminal Procedure Act as electronic tokens premised on electronic transactions or transfers, making the seizure disposition legal.”

Read more: South Korea Cracks Down on Unregistered Overseas Crypto Exchanges

The Supreme Court endorsed that analysis, underscoring that seizure targets are not confined to physical property and may include electronically managed assets with independent economic value and practical controllability.

The dispute stemmed from a January 2020 money laundering investigation in which police secured 55.6 bitcoins held in a custodial exchange account under Mr. A’s name, valued at about 600 million won, or roughly $416,600, at the time. After a series of challenges, the justices concluded:

The disposition in this case, which seized bitcoin under Mr. A’s name managed by the virtual asset exchange, is legal, and there is no error in the original court’s judgment dismissing the quasi-appeal.

Legal observers view the ruling as a consolidation of earlier Supreme Court decisions from 2018 and 2021 that characterized bitcoin as intangible property with monetary value and as a virtual asset capable of constituting criminal proceeds. By confirming that exchange-held bitcoin can be seized at the investigation stage, the decision strengthens enforcement clarity while reinforcing the recognition of digital assets within established criminal procedure.

• Can South Korean authorities seize bitcoin held on exchanges?
  Yes, the Supreme Court ruled that exchange-held bitcoin is subject to seizure during criminal investigations.
• What law did the court rely on to justify bitcoin seizure?
  The ruling cited the Act on Protection of Virtual Asset Users and the Criminal Procedure Act.
• Does bitcoin qualify as property under South Korean criminal law?
  The court reaffirmed that bitcoin is intangible property with economic value eligible for confiscation.
• What case triggered the Supreme Court’s bitcoin ruling?
  The decision arose from a 2020 money laundering case involving 55.6 bitcoins held in a custodial exchange account.

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