South Korea updates crypto seizure rules, plans private custodian

South Korea has issued new guidelines for managing seized cryptocurrencies, including privacy coins, and plans to appoint a private custodian by mid-2026 to improve security and oversight.

South Korean police have introduced comprehensive guidelines for managing seized cryptocurrencies, including privacy-focused assets like darkcoins. This move follows incidents of mishandling and loss of confiscated digital assets. The new framework outlines compliance procedures for each stage of the seizure process and introduces hot wallet systems to securely store highly anonymous digital assets. Authorities also plan to select a private crypto custody provider by mid-2026 to further enhance security and align with international standards. These draft guidelines aim to address gaps in the current system, standardize the management of seized virtual assets, and provide clear direction for officials. Multiple companies are competing for the lucrative government contract, as South Korea’s seized crypto holdings have surpassed 54 billion won. The updated rules mark a significant overhaul in law enforcement’s approach, especially regarding privacy coins that are difficult to track.