South Korea develops crypto-specific procedures for asset seizures and liquidation: report

South Korea’s Supreme Court has proposed amendments that would introduce detailed procedures for the seizure and liquidation of digital assets.

According to a report from the local news agency Newsis, the proposed amendments aim to formalize how courts enforce judgments involving cryptocurrencies.

Under the new rules, a court-issued seizure order would immediately bar debtors from disposing of digital assets and require them to transfer the assets to a court enforcement officer. The seizure would become effective upon the officer’s receipt of the assets.

The amendments also provide a legal basis for the liquidation of seized crypto assets. Courts could issue a transfer order to deliver the assets to creditors at a court-determined value or direct enforcement officers to sell them. Officers would be permitted to move assets into dedicated accounts at virtual asset service providers for sale or entrust the sale to such providers. Additional pathways include converting assets into more liquid cryptocurrencies, such as bitcoin, before sale.

The amendments also establish clearer rules for provisional measures, including preliminary seizures and injunctions, designed to prevent debtors from transferring or hiding crypto assets while litigation is ongoing.

The Supreme Court reportedly said the changes are needed due to the rising number of civil cases involving cryptocurrencies. It will accept public comments on the draft until Aug. 11, and the revisions are expected to take effect in October.