South Korea Moves to Allow Seizure of Self‑Custody Crypto Wallets

Overview

• National Tax Service researchers have proposed amending the Criminal Procedure Act to let courts and investigators seize and manage crypto stored in self‑custody wallets that are controlled by private keys.
• The paper calls for warrants to state the asset type, amount, verified wallet address, receiving address, transfer method, and storage process so seizures follow a standard, auditable process.
• To reduce the risk that suspects keep control after a seizure, the proposal would require transferring assets into controlled wallets and create a shared custody model with court oversight.
• The push follows a 2025 Supreme Court ruling that left procedures for private wallets unresolved and a security breach this year that exposed a recovery phrase and led to about $4.8 million in unauthorized transfers.
• If adopted, the changes would build on recent draft rules for exchange‑held assets and could force exchanges, custody providers, courts, and investigators to adopt new technical safeguards and joint procedures for handling seized crypto.