South Korea's National Police Agency is developing new management guidelines for handling seized cryptocurrencies. According to a report by NewDaily on February 23, this initiative stems from a criminal case in 2021 where 22 Bitcoin were discovered to have been transferred out of police custody. Park Jeong-hyun, head of the Seoul Metropolitan Police Agency, stated that independent cryptocurrency management guidelines will be issued to frontline units.
The proposed framework aims to introduce monthly monitoring of seized virtual assets, a crucial element missing from current procedures. The police also plan to establish separate rules for seizure and storage, along with a specialized field operations manual for officers handling cryptocurrency evidence. This manual will cover aspects such as deposit and withdrawal freezes, seizure execution, storage protocols, transfer to prosecutors, asset return, and temporary restitution. This phased approach signifies a significant departure from general evidence handling rules primarily designed for physical items.
Furthermore, the police are considering outsourcing custody through licensed virtual asset service providers. This move would shift seized cryptocurrencies away from temporary wallet arrangements into regulated third-party infrastructure.
The draft text of this improvement plan has not yet been made public. Based on existing reports, its exact legal effect, final wording, and implementation timeline remain unclear.
The drafting of these new regulations is directly linked to a case at the Gangnam Police Station in 2021, where 22 Bitcoin submitted as evidence were found to have been transferred from police custody. At current prices, these Bitcoin are valued at approximately 2.1 billion Korean won. National Assembly member Chae Hyun-il pointed out that the current management rules "still focus on physical evidence" and fail to adequately address the unique nature of digital assets. Unlike cash or physical goods, cryptocurrencies can be transferred instantly, anonymously, and irreversibly once wallet access is compromised.
Police seizure data indicates a small but growing trend in cases involving cryptocurrencies: 2 cases in 2021, 8 in 2022, 6 in 2023, 4 in 2024, and none reported so far in 2025. Despite the limited numbers, the Gangnam incident has clearly exposed how a single point of control failure can lead to significant financial losses.
On a positive note, stricter chain-of-custody controls and regular monitoring are expected to enhance the credibility of South Korea's cryptocurrency enforcement. If the police adopt licensed custodians and implement standardized procedures, the risk of evidence loss or tampering will be substantially reduced. However, potential risks lie in the execution phase. As the promised rules are not yet fully public, and reports have not confirmed whether custody outsourcing has been officially initiated, frontline units may still face uncertainty in practical operations without legally binding official orders.