Summary

  • South Korea said amended civil execution rules codifying compulsory enforcement procedures for virtual assets have taken effect, spelling out the process from seizure to liquidation.
  • It said virtual assets held at exchanges will be subject to seizure through a claim for transfer of virtual assets, while altcoins can be exchanged into other virtual assets before being sold.
  • Cases involving virtual-asset enforcement surged from 423 in 2023 to 3,186 in the first nine months of 2026, and the revision is expected to make enforcement procedures more predictable.

Forecast Trend Report by Period

South Korea has formalized procedures for seizing and converting into cash virtual assets such as Bitcoin held by debtors. The rules distinguish between virtual assets kept at exchanges and those managed directly in personal wallets. They also allow hard-to-sell altcoins and similar assets to be exchanged for other virtual assets before being sold.

The revised civil execution rules covering compulsory enforcement against virtual assets took effect on Nov. 1, according to the Supreme Court. The court said the changes clarify the procedures that courts, enforcement officers and virtual-asset service providers must follow from seizure through liquidation, reflecting the way such assets are held and traded.

Civil enforcement cases involving virtual assets have been rising quickly. Cases naming 28 registered domestic virtual-asset service providers as third-party obligors increased from 423 in 2023 to 958 in 2024 and 3,136 in 2025. In the first nine months of 2026 alone, 3,186 cases were filed, surpassing the total for all of last year. A third-party obligor is a third party that owes an obligation to the debtor in connection with the claim subject to enforcement.

Compulsory execution against virtual assets was already possible. But with no specific rules in place, courts had followed procedures used for "other property rights" in practice. Virtual assets have no physical form and no public registration system like the one used for real estate, creating a need for procedures tailored to their characteristics.

Under the revised rules, virtual assets held through an exchange are subject to seizure as a "claim for transfer of virtual assets." That refers to a user's right to require an exchange to send a specified type and quantity of virtual assets to a designated address. Once a seizure order is issued, the exchange can no longer transfer the assets to the debtor. The debtor also cannot dispose of the transfer claim or receive the assets.

The rules set out several ways to convert the assets into cash. An exchange can be entrusted with the sale, or the assets can be moved to an enforcement officer's account for sale. Sales through another exchange are also permitted. Altcoins and other assets that are difficult to liquidate can be exchanged for other virtual assets that are easier to sell before the sale. The court will decide the sale method after considering trading conditions and the views of the parties. Proceeds will go through distribution procedures and be used to repay creditors.

If a debtor directly manages virtual assets through a personal wallet or similar means, the virtual assets themselves become the target of seizure. In that case, the court must both prohibit disposal and order the assets transferred to an enforcement officer. Anyone with the necessary information, including a private key, can move the assets at any time, making a disposal ban alone ineffective. The assets can then be transferred to an address designated by the creditor or sold through an exchange under the court's order.

A court administration official said the revision should make enforcement procedures for virtual assets more predictable. The official added that the court would continue refining related systems and practices to better protect property rights and improve the effectiveness of enforcement.

Lee Seung-woo, Hankyung.com reporter [email protected]

Korea Economic Daily