The Supreme Court of Korea published a proposed amendment to the Civil Execution Rules on 2 July 2026, introducing standardized procedures for court-ordered seizure and liquidation of virtual assets held on exchanges. The proposal is at the consultation stage, with public comments accepted until 11 August 2026, and is scheduled to take effect on 1 October 2026 subject to finalization. The amendment is proposed, not yet final.
Once a court issues a seizure order against a debtor's virtual assets held on a registered exchange, the draft rules prohibit the debtor from transferring or disposing of the assets, and block third-party transfers. The court may then direct the exchange to liquidate the holdings and remit the proceeds. The rules apply to exchanges registered with the Financial Intelligence Unit under the Act on Reporting and Using Specified Financial Transaction Information and the Virtual Asset User Protection Act, both of which govern licensed virtual asset service providers in South Korea.
Registered virtual asset exchanges and custodians operating in South Korea will be required to respond to court seizure orders by freezing the relevant accounts and executing court-directed sales. Debtors holding crypto on domestic exchanges will no longer be able to transfer assets to evade civil judgments once a seizure order is in place. Foreign creditors seeking enforcement against debtors with exchange-held crypto in South Korea will have a clearer and more standardized procedural route for recovery.
The proposed rules apply to assets held on registered domestic exchanges. Self-custodied assets in personal wallets and holdings on foreign unregistered platforms fall outside the direct scope of the amendment. The comment deadline of 11 August 2026 gives affected exchanges and legal practitioners a narrow window to submit observations before final adoption. Exchanges will need to update internal compliance systems to process court-directed freeze orders and liquidation instructions.
Licentium advises on virtual asset regulatory compliance and enforcement matters in Korean and international jurisdictions, and can refer clients to specialist Korean counsel for exchange registration and civil proceedings support. Work we undertake includes virtual asset service provider licensing, enforcement strategy, AML compliance structuring, and civil proceedings support for creditors.