South Korea’s National Police Agency has drafted new guidelines for handling seized cryptocurrencies, including privacy-focused assets. The move follows incidents of lost or mishandled digital evidence. Authorities plan to select a private custody provider by mid-2026 after previous failed attempts and are working with a limited budget.
South Korea’s National Police Agency (KNPA) has drafted new guidelines for managing seized cryptocurrencies. The directive includes measures for handling software wallets and privacy-focused tokens.
A police spokesperson stated that investigative paradigms have changed. “In the past, seized assets were stored in warehouses. Now we must manage wallet addresses and private keys,” the spokesperson said. The move follows recent cases where seized crypto was lost in government custody.
The KNPA also plans to finalize selecting a private custody provider within the first half of 2026. Three separate bidding attempts in 2025 reportedly failed after applicants were deemed unsuitable.
Budget constraints pose a significant challenge. Police allocated only about $55,600 to handle seized crypto assets despite the risks involved.
Based on finalized court rulings, the value of crypto seized by police over five years totals about $36.5 million. This includes approximately $36.5 million in Bitcoin (BTC) and $1.8 million in Ether (ETH).
The new draft follows heightened scrutiny after a phishing incident involving government-held Bitcoin. About 320 Bitcoin went missing from prosecutors’ custody during an investigation in August 2025.
The unknown hacker unexpectedly returned the stolen crypto in February. Prosecutors later sold the assets and transferred about $21.5 million to the national treasury.
