South Korea’s Supreme Court Ruling on Cryptocurrency Confiscation
In a landmark ruling, South Korea’s Supreme Court has determined that cryptocurrencies, specifically Bitcoin held on exchange platforms, can be legally confiscated under the nation’s Criminal Procedure Act. This decision concludes a legal dispute initiated by an individual involved in a money laundering case, known only as Mr. A.
Background of the Case
The ruling comes on the heels of significant events in South Korea’s crypto landscape, where by March 2025, over 16 million citizens—approximately one-third of the entire population—were reported to own cryptocurrency accounts on major exchanges. The particular case in question emerged from a police operation that seized 55.6 Bitcoin from Mr. A’s exchange account, valued at around 600 million Korean won (approximately $413,000) at the time. This seizure was executed as part of an ongoing investigation into alleged money laundering activities.
Legal Proceedings
Initially, Mr. A sought to challenge the seizure, asserting that Bitcoin should be classified as a non-physical object, which he argued made it exempt from confiscation under Article 106. This section of the law governs the seizure of evidence related to criminal activities. However, the Seoul Central District Court upheld the legality of the seizure, prompting Mr. A to escalate his appeal to the Supreme Court in December.
Supreme Court’s Decision
The Supreme Court dismissed Mr. A’s claims, affirming that Bitcoin should not be excluded from the scope of assets subject to seizure. The court stated, “Seizure targets include both tangible objects and electronic information.”
The court further characterized Bitcoin as a digital token with intrinsic economic value that can be managed and traded, and thus falls within the realm of seizable assets by authorities. The court concluded that the confiscation of Bitcoin associated with Mr. A was lawful, reinforcing lower court decisions and adhering to previous rulings that have consistently classified cryptocurrencies as property.
Legal Framework and International Context
This trend includes a significant 2018 ruling where the Supreme Court recognized Bitcoin as intangible property and established that it could be taken if obtained through illegal means. The court continued to iterate on this legal framework in subsequent years, reinforcing its stance on Bitcoin and other crypto assets being treated as property interests in the context of criminal law.
Internationally, there has been a similar movement towards officially regarding digital assets as property, exemplified by recent legislation in the UK that formally acknowledges cryptocurrencies as property. This law aims to clarify legal matters surrounding cryptocurrency related to theft, inheritance, and bankruptcy, reflecting a growing consensus on the need for clear legal guidelines concerning digital assets and their status in the justice system.
Legal experts, like Etay Katz from Ashurst, have pointed out that this legislation represents an important recognition of the property-like nature of cryptocurrency, further facilitating legal proceedings related to these assets.
Conclusion
Overall, the South Korean Supreme Court’s ruling not only confirms the legal status of Bitcoin but also underscores the increasing integration of digital currencies within the framework of national law.
