The case stemmed from a police seizure of 55.6 Bitcoin, worth about 600 million Korean won ($413,000) at the time, from an exchange account held by an individual identified only as Mr. A. The assets were taken as part of a money laundering investigation.
Mr. A later filed a motion for reconsideration, claiming that Bitcoin held in an exchange account could not be seized because it was not a “physical object” under Article 106 of the Criminal Procedure Act. That provision allows authorities to seize evidence or items subject to confiscation if they are recognized as being related to a criminal case.
The Seoul Central District Court dismissed the motion, ruling that the seizure was lawful. Mr. A then filed a further appeal to the Supreme Court in December.
In its final ruling, the Supreme Court rejected the argument that Bitcoin falls outside the scope of seizure law. “Under the Criminal Procedure Act, seizure targets include both tangible objects and electronic information,” the court said, according to Chosun Daily.
The court added that Bitcoin, “as an electronic token with the ability to be independently managed, traded, and substantially controlled in terms of economic value,” qualifies as an asset that can be seized by courts or investigative agencies.
“The disposition in this case, which seized Bitcoin under Mr. A’s name managed by a virtual asset exchange, is lawful, and there is no error in the lower court’s decision to dismiss the motion for reconsideration,” the ruling said.
The decision is consistent with a series of earlier South Korean court rulings that have treated cryptocurrencies as property or assets. In 2018, the Supreme Court held that Bitcoin is an intangible property with economic value and can be confiscated if obtained through criminal activity. That same year, crypto tokens were recognized as divisible assets in divorce proceedings.
In 2021, the court further clarified that Bitcoin constitutes a virtual asset that embodies economic value, and is considered a property interest under criminal law.
Other jurisdictions have taken similar approaches, classifying digital assets as property for legal and enforcement purposes.
The UK legislation builds on recommendations from the Law Commission of England and Wales and provides statutory backing to legal principles that had previously developed through common law.
Such measures are intended to improve clarity and enforcement in cases involving digital assets, particularly where criminal proceeds and asset recovery are concerned.
Etay Katz, head of digital assets at law firm Ashurst, told Decrypt at the time that the law was “a welcome and timely statutory recognition of the fundamental property quality in crypto assets.”
