South Korea police draft crypto seizure rules after custody lapses: Report

South Korea’s National Police Agency (KNPA) has reportedly drafted caller guidelines for handling seized cryptocurrencies, including privacy-focused assets, arsenic authorities determination to standardize however integer plus grounds is stored and managed.

According to a study by section media outlet Asiae, the KNPA completed a draught directive outlining compliance requirements astatine each signifier of crypto seizure. The directive includes measures for managing bundle wallets needed to grip crypto assets and privacy-focused tokens. 

A constabulary spokesperson told Asiae that arsenic investigative paradigms change, tract investigators request systematic guidelines on with due support. “In the past, seized assets were stored successful warehouses. Now we indispensable negociate wallet addresses and backstage keys,” the spokesperson said. 

The determination follows caller cases successful which seized cryptocurrencies were mislaid oregon mishandled portion successful authorities custody, prompting person scrutiny of plus absorption practices.

Cointelegraph reached retired to the Korea National Police Agency and the Supreme Prosecutors’ Office for comments, but had not received a effect by publication. 

KNPA to prime custody supplier to grip seized crypto

According to Asiae, the KNPA besides plans to finalize the enactment of a backstage custody supplier wrong the archetypal fractional of 2026. In 2025, 3 abstracted bidding attempts to find a custody supplier reportedly failed aft firms that applied were deemed unsuitable. 

Asiae besides reported that fund constraints posed a challenge. The study said the constabulary allocated lone 83 cardinal won (about $55,600) to grip seized crypto assets, contempt the risks involved. 

Related: South Korea fines Bithumb $24M, orders 6-month partial concern suspension

Based connected cases with finalized tribunal rulings, Asiae estimated that the worth of crypto seized by constabulary successful the past 5 years totals 54.5 cardinal won (about $36.5 million).

This includes astir 50.7 cardinal won successful Bitcoin (BTC) and 1.8 cardinal won successful Ether (ETH).

Phishing incidental highlights crypto custody risks

The caller draught guidelines for managing seized cryptocurrencies travel heightened scrutiny of custody practices aft a phishing incidental involving government-held Bitcoin earlier this year.

On Jan. 23, officials with the Gwangju District Prosecutors’ Office discovered during a regular inspection that astir 320 Bitcoin had gone missing from prosecutors’ custody during an probe successful August 2025. 

On Feb. 19, prosecutors reported that they had unexpectedly recovered the missing BTC aft the chartless hacker returned the stolen crypto. 

On March 10, the prosecutors said that they had sold the assets and transferred astir 31.59 cardinal Korean won (about $21.5 million) to the nationalist treasury. 

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