South Korea sets court rules for crypto seizure and liquidation

South Korea’s National Court Administration has established procedures for the compulsory execution of cryptocurrency, from seizure to liquidation, Yonhap reported. The revised civil execution rules, which reflect the legal nature of crypto assets and their trading structure, took effect on Nov. 1. Because virtual assets have no physical form or public disclosure mechanism, there had been no specific execution rules for them under civil enforcement regulations. In practice, authorities had relied on procedures covering other property rights. The National Court Administration formed a task force in July last year to prepare execution procedures for virtual assets and has since reviewed related legal principles and practical issues. Under the revised rules, compulsory execution targets and procedures are divided between cases in which a debtor uses a virtual asset service provider, such as an exchange, and cases in which a debtor directly holds virtual assets through a personal wallet. For virtual assets held and managed through exchanges and similar platforms, the target of seizure is the right to claim transfer of the virtual asset. If a debtor directly manages virtual assets through a personal wallet or similar means, the virtual asset itself becomes subject to compulsory execution. The liquidation process may proceed through a transfer order, a sale order or other legitimate methods for claims to the transfer of virtual assets, depending on the application filed by the seizing creditor.