South Korea Issues Crypto Seizure Guidelines, Forms Data-Sharing Pact

South Korean authorities have unveiled comprehensive new guidelines for managing seized cryptocurrencies and forged a key partnership to curb illicit cross-border transfers, addressing vulnerabilities exposed by past losses and rising financial crimes involving digital assets.

The Korean National Police Agency issued its first formal directive on handling privacy-focused cryptocurrencies, such as Monero and Zcash, which obscure transaction details like sender, receiver, and amounts. The rules require law enforcement to store these assets in software or hot wallets on dedicated servers, with private keys under strict agency control and sealed to prevent unauthorized access. This marks a shift from previous reliance on hardware wallets, which proved inadequate for privacy coins. The guidelines also standardize procedures for seizing, storing, and managing all digital assets, ensuring consistent practices across investigations.

These measures follow a series of high-profile incidents that resulted in significant losses. In one case, 22 Bitcoin vanished from the Gangnam Police Station's custody. Another involved 320 Bitcoin temporarily stolen from prosecutors in a 2025 phishing...