Seizure Alone Cannot Stop Coins Held in Personal Wallets ... Courts Must Order Their Transfer to Enforcement Officers

[Financial News] From now on, when attaching virtual assets such as Bitcoin held in personal wallets, courts must issue an order prohibiting their disposal and requiring their transfer to a court enforcement officer. This is because a person holding the private key can move the coins at any time, meaning an attachment would be rendered ineffective if the court merely prohibited their disposal.
The Supreme Court of Korea said on the 9th that revised Civil Execution Rules setting out procedures for compulsory execution against virtual assets took effect on the 1st. A new Section 2-2, titled “Compulsory Execution Against Virtual Assets,” was added to the Civil Execution Rules as Article 175-2 and following.
The new rules divide virtual assets into two categories based on how they are held and specify different assets as the target of execution. When a debtor directly manages assets through a personal wallet or other means, the virtual assets themselves are subject to attachment. In such cases, the court must not stop at prohibiting the debtor from disposing of them; it must order the debtor to transfer the assets to a court enforcement officer. Virtual assets can be transferred electronically and instantly, and anyone with the necessary information, such as a private key, can dispose of them at any time. The rules therefore require the attached assets to be kept under the enforcement officer’s control so they can later be liquidated reliably. Liquidation can be carried out through a virtual asset transfer order, which sends the coins to an address designated by the attaching creditor, or a virtual asset sale order, under which the enforcement officer sells them through an exchange.
For virtual assets held on an exchange, the target of execution is not the coins themselves but the “right to claim the transfer of virtual assets.” This is the user’s right to demand that the exchange send a specified type and amount of virtual assets to an address designated by the user. Once an attachment order is issued, the exchange cannot transfer the virtual assets to the debtor, and the debtor can neither dispose of the transfer claim nor withdraw the coins. The rules also set out a statement procedure under which the exchange informs the court of the details of the attached claim.
The rules provide for four ways to sell the assets and convert them into cash. The basic options are to entrust the sale to an exchange or to transfer the assets to an enforcement officer’s account opened with an exchange, where the officer sells them. If the third-party debtor is an individual rather than an exchange, or the assets are listed on a coin market that does not support trading in won, the coins can be transferred to the enforcement officer and sold through another exchange. For altcoins and other assets with low trading volumes that are difficult to liquidate, the rules also allow them to be exchanged for other virtual assets or transfer claims that are easier to liquidate before being sold.
The court determines the method of sale after considering the type of virtual asset, trading conditions, whether the exchange can support the sale, and the parties’ views. It orders the enforcement officer to sell at the market price on the date of sale or at another appropriate value. The date of sale is fixed as the reference point in consideration of the sharp price fluctuations characteristic of these assets. The proceeds are distributed through the distribution process and used to repay the claims.
Cases involving the enforcement of virtual assets have increased more than sevenfold in just three years. Civil enforcement cases naming 28 virtual asset service providers registered in Korea as third-party debtors rose each year, from 423 in 2023 to 958 in 2024 and 3,136 in 2025. This year, 3,186 cases were filed in the first nine months alone, already exceeding last year’s full-year total. At the same pace, the number is expected to top 4,000 this year.
Cases were increasing, but there were no specific rules governing them. Virtual assets have no physical form, and there are no means of public notice such as real estate registration, vehicle registration, or the electronic account register for electronically registered shares. With no specific provisions in the existing Civil Execution Act and Civil Execution Rules applicable to virtual assets, practitioners had applied by analogy the procedures for “execution against other property rights.” In July last year, the Court Administration Office formed a task force to develop procedures for enforcing virtual assets. It reviewed the relevant legal principles and domestic and foreign systems and practices, and gathered views from relevant institutions and the virtual asset industry.
The Court Administration Office expected the revision to support the realization of creditors’ rights and protect debtors’ procedural rights, while clarifying the standards for how courts, enforcement officers, and virtual asset service providers handle their work and making enforcement procedures more predictable. The application form for an attachment order is available in the document submission section of the Electronic Litigation Portal.

[email protected] Kim Dong-gyu Reporter