South Korea to enforce new crypto asset seizure rules

South Korea will enforce new rules for seizing and liquidating crypto assets in civil cases from October 1, requiring exchanges to cooperate and providing clear procedures for asset transfer and sale.

South Korea is set to introduce new civil enforcement rules for virtual assets, with amendments to the Civil Execution Rules taking effect on October 1, following a public comment period. The Supreme Court's proposed changes will establish formal procedures for courts to seize, transfer, and liquidate digital assets in civil cases. Once a court issues a seizure order, debtors will be prohibited from disposing of the assets, and exchanges or custodians must transfer the crypto to a court enforcement officer. The rules outline several options for realizing seized assets, including direct transfer to creditors, sale by enforcement officers, or conversion into more liquid cryptocurrencies before sale. These amendments also clarify provisional measures to prevent debtors from hiding or transferring assets during litigation. By bringing digital assets under the same legal enforcement framework as traditional property, the new rules provide creditors with a clear legal pathway to recover debts using crypto holdings. Public comments on the draft will be accepted until August 11.