TL;DR
- South Korea’s National Police Agency drafted new guidelines for seized crypto, covering privacy coins, software wallets, wallet addresses and private keys at each seizure stage.
- Police also aim to appoint a private custody provider in the first half of 2026 after three failed 2025 bidding attempts.
- The push follows custody lapses, including a case where 320 BTC disappeared from prosecutors’ control, returned unexpectedly, and were later sold for the treasury.
South Korea’s police are moving to impose order on one of the trickiest corners of digital evidence, and the new draft rules show how seriously authorities now view the custody of seized crypto. The National Police Agency has prepared guidelines for handling confiscated digital assets, including privacy-focused coins, as investigators try to standardize how these holdings are stored and managed. The draft reportedly lays out compliance requirements for each stage of seizure and includes procedures for software wallets, wallet addresses and private keys, reflecting how criminal evidence has shifted from warehouses to cryptographic infrastructure itself.
A custody overhaul is being driven by earlier failures
Behind the effort is a growing recognition that crypto seizures now demand standards closer to those used in financial infrastructure than in traditional evidence storage. A police spokesperson said field investigators need systematic guidance and support as investigative paradigms change. The urgency is not theoretical. The push for new rules follows cases in which seized cryptocurrencies were lost or mishandled while under government control, raising questions about agencies holding these assets and whether they have kept pace with the realities of custody and evidence properly. That gap is what the draft now aims to close.
The police are also trying to solve the institutional gap behind the problem, and that is why a private custody provider is becoming central to the plan. Authorities reportedly aim to finalize the selection of an outside custodian in the first half of 2026 after three separate bidding attempts in 2025 failed because applicants were deemed unsuitable. Budget pressure remains part of the challenge. Police reportedly allocated only 83 million won, about $55,600, to manage seized crypto despite the operational and security risks involved. Over five years, police seizures were estimated at 54.5 billion won.
The timing of the guidelines is telling because recent events turned crypto custody from an administrative issue into an institutional embarrassment. On Jan. 23, officials at the Gwangju District Prosecutors’ Office discovered during a routine inspection that about 320 BTC had gone missing from prosecutors’ custody during an August 2025 investigation. On Feb. 19, prosecutors said the unknown hacker unexpectedly returned the coins. Then, on March 10, officials sold the recovered assets and transferred 31.59 billion won, about $21.5 million, to the national treasury. That sequence explains why standardized crypto storage no longer looks optional.
