South Korea's Supreme Court to Introduce Procedures for Seizing and Liquidating Crypto Assets, Expected to Implement in October

07/06 09:35

On July 6, South Korea's Supreme Court proposed a draft amendment to civil execution rules, aiming to establish procedures for the seizure, confiscation, and liquidation of crypto assets, providing a clear legal basis for enforcing civil judgments involving cryptocurrencies. According to the draft, once the court issues a seizure order, the debtor will be immediately prohibited from disposing of the relevant crypto assets and must transfer the assets to the court's enforcement officer. The seizure will take effect once the officer receives the assets. Regarding asset disposal, the court may directly transfer the crypto assets to the creditor at a value determined by the court, or instruct the enforcement officer to sell the assets. The officer can transfer the assets to a dedicated account of a Virtual Asset Service Provider (VASP) for sale or commission a relevant platform to sell them. If necessary, the assets may first be converted into more liquid cryptocurrencies like Bitcoin before liquidation. Additionally, the amendment draft clarifies preservation measures for crypto assets during litigation, including provisional attachments and injunctions, to prevent debtors from transferring or hiding crypto assets. The Supreme Court of South Korea stated that with the increasing number of civil cases involving crypto assets, it is essential to improve the relevant enforcement rules. The draft will be open for public consultation until August 11, with the revised content expected to take effect in October this year.

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