South Korea's Supreme Court has legalized the seizure of bitcoins from exchange wallets, enhancing law enforcement's ability to act in criminal cases.
The South Korean Supreme Court has made a landmark ruling, declaring the seizure of bitcoins from exchange wallets in criminal investigations as lawful. This decision marks a significant shift in the legal treatment of cryptocurrencies in the country.
Previously, only the confiscation of assets for state benefit was allowed. The case in question involved an individual referred to as "A," who is under suspicion for money laundering. In January 2020, authorities confiscated 55.6 BTC, valued at around 600 million won at the time, from his exchange account.
The defendant's legal team contested the seizure, arguing that cryptocurrency held in exchange accounts does not constitute a physical object and therefore should not be subject to seizure under the Criminal Procedure Code. However, the court dismissed this argument and affirmed the legality of the police's actions.
The ruling clarified that seizure can apply to both tangible items and electronic information. The judges recognized bitcoin as an electronic token with economic value, confirming that it can be managed and transferred by its owner, thus making it a valid target for law enforcement actions.
Legal analysts believe this decision eliminates previous uncertainties surrounding the legality of cryptocurrency seizures, providing investigators with a solid framework for freezing assets on platforms such as Upbit and Bithumb during investigations.
This ruling follows previous decisions by the Supreme Court, which in 2018 recognized digital assets as subject to confiscation and in 2021 broadened fraud laws to encompass cryptocurrencies.
