In a significant ruling, South Korea’s Supreme Court has determined that Bitcoin held in cryptocurrency exchange accounts is subject to seizure under the nation’s Criminal Procedure Act. This decision arises from a money laundering case in which police seized 55.6 Bitcoin, valued at approximately 600 million Korean won (around $413,000) in 2020, from an individual known only as Mr. A.
The case became contentious when Mr. A challenged the legality of the seizure, arguing that Bitcoin, being a digital asset without physical form, should not be regarded as a “physical object” as defined in Article 106 of the Criminal Procedure Act. This provision allows authorities to confiscate evidence or items deemed connected to criminal activity. After the Seoul Central District Court dismissed Mr. A’s plea, finding the seizure lawful, he escalated the matter to the Supreme Court.
The Supreme Court upheld the lower court’s decision, clarifying that Bitcoin and similar digital assets qualify as seizure targets. The court stated that under the Criminal Procedure Act, both tangible objects and electronic information are eligible for seizure. It highlighted Bitcoin’s status as an “electronic token” that can be independently managed, traded, and substantially controlled, thereby affirming its classification as an asset that can be legally seized.
This ruling aligns with prior decisions by South Korean courts, which have increasingly recognized cryptocurrencies as property. For instance, in 2018, the Supreme Court labeled Bitcoin as intangible property with economic value, making it subject to confiscation when linked to criminal actions. Furthermore, the same year, cryptocurrencies were deemed divisible assets in divorce cases. A subsequent ruling in 2021 further established that Bitcoin embodies economic value, classifying it as a property interest under criminal law.
Globally, other jurisdictions are also adapting their legal frameworks to treat digital assets similarly. Recently, the UK enacted legislation that formally recognizes digital assets as property, affording them the same legal standing as conventional property forms. This legislation aims to provide clearer guidance for courts managing cases related to theft, inheritance, and insolvency involving cryptocurrency. The UK’s law reflects a growing international consensus on the need for clarity and enforceability in matters related to digital assets, particularly where criminal proceeds and asset recovery are involved.
As cryptocurrencies continue to grow in popularity—South Korea boasts one of the highest rates of crypto ownership worldwide, with over 16 million people engaging with major exchanges—legal precedents surrounding them are becoming ever more critical in the context of law enforcement and financial regulation.
