South Korea Police Move to Standardize Crypto Seizure and Custody Rules

South Korea’s Korean National Police Agency is preparing new rules to manage seized cryptocurrencies, aiming to improve oversight and prevent losses during investigations. The draft directive outlines procedures for handling digital assets at every stage, including the management of wallet addresses, private keys and software tools required for storage.

Officials say the shift reflects changing investigative needs as law enforcement increasingly deals with blockchain based assets rather than physical evidence. The framework also includes provisions for handling privacy-focused cryptocurrencies, which present additional technical challenges.

Custody Provider Plan Follows Past Asset Mismanagement

The agency is expected to select a private custody provider in the first half of 2026 after multiple failed attempts in previous bidding rounds. Budget limitations have also complicated efforts, despite the growing value of seized assets.

Reports estimate that authorities have confiscated billions of won in cryptocurrencies over the past five years, largely in Bitcoin and Ethereum.

The move follows heightened scrutiny after a recent incident in which hundreds of Bitcoin temporarily went missing from government custody before being recovered, underscoring the risks associated with managing digital assets.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.