South Korea’s National Police Agency (KNPA) has reportedly drawn up new guidelines for handling seized cryptocurrencies, including privacy-focused assets, as authorities move to standardize how to secure and manage evidence of digital assets.
According to According to a report by local media outlet Asiae, the KNPA has completed drafting guidelines outlining compliance requirements at each stage of crypto confiscation. This guidance includes steps for managing the software wallets required to manage crypto-assets and privacy-focused tokens.
A police spokesperson told The Asian that as investigation patterns change, field investigators need systematic guidelines with proper support. “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 in which confiscated cryptocurrencies were lost or misused while in government custody, prompting closer scrutiny of asset management practices.
Cointelegraph reached out to the National Police Agency and the Supreme Prosecutors’ Office for comment, but did not receive a response by publication.
KNPA will select a custody provider to handle the seized crypto.
KNPA also plans to finalize the selection of a private custody provider within the first half of 2026, according to Asiae. In 2025, three separate bid attempts to find a custody provider reportedly failed after the firms applying were deemed unsuitable.
Asiae also reported that budgetary constraints presented a challenge. Despite the risks, the police allocated only 83 million won (about $55,600) to handle the seized crypto assets, the report said.
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Based on cases with final court decisions, Asia estimated that the value of crypto seized by police over the past five years totaled 54.5 billion won (about $36.5 million).
This includes approximately 50.7 billion won in Bitcoin (BTC) and 1.8 billion won in Ether (ETH).
The phishing incident highlights the dangers of crypto custody.
The new draft guidelines for the management of seized cryptocurrencies follow stricter scrutiny of custody practices after a phishing incident involving government-held bitcoin earlier this year.
On January 23, officials from the Gwangju District Prosecutors’ Office discovered during a routine inspection that approximately 320 bitcoins had disappeared from the prosecutor’s custody during an investigation in August 2025.
On February 19, prosecutors reported that they had unexpectedly recovered the missing BTC after the unknown hacker returned the stolen crypto.
On March 10, prosecutors said they had sold the assets and transferred about 31.59 billion Korean won (about $21.5 million) to the national treasury.
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