South Korea's Supreme Court Rules Bitcoin Held on Exchanges Can Be Confiscated

Historic Decision Regarding Cryptocurrencies

The Supreme Court of South Korea has issued a definitive ruling establishing that Bitcoin held in the accounts of centralized exchanges can be confiscated by investigators, marking a significant shift in how cryptocurrency assets are treated under criminal law.

In a decision dated December 11, 2025, and published through the court's official bulletin, the ruling supported the confiscation of 55.6 Bitcoin (BTC) held in a South Korean exchange account by a suspect in a money laundering investigation. Bitcoin is now considered a "confiscatable object" under the Criminal Procedural Law, as it represents electronic information with manageability, marketability, and independent economic value.

This decision was based on the precedent that recognized Bitcoin as confiscatable income derived from criminal activities and as a “property interest” subject to fraud, but it advances further by directly addressing assets stored in custodial wallets of exchanges, establishing a precedent for future investigations and legislation related to digital assets.

As a result of this ruling, Korean users who store BTC on platforms like Upbit and Bithumb face clearer legal exposure. Cryptocurrencies associated with crimes can be blocked and confiscated directly on the platform, and exchanges will be under greater pressure to swiftly comply with mandates and maintain robust Know Your Customer (KYC) and transaction tracking systems.

This move aligns with existing global practices in the United States and the European Union, where authorities already utilize confiscation tools to take control of Bitcoin and other cryptocurrencies held by centralized intermediaries in criminal cases. Meanwhile, the Financial Services Commission of South Korea is reviewing a proposal that would allow for the preventive freezing of cryptocurrency accounts suspected of market manipulation, similar to measures in the securities market.

At the same time, the government is preparing to implement legislation on digital assets, which includes a licensing regime and rules for stablecoin issuers, a framework for cross-border stablecoin transfers, and a plan to introduce asset-backed exchange-traded funds to enhance market access.