South Korean police move seized crypto to Upbit Custody

Police investigative departments have been instructed to use Upbit Custody, according to a November 9 report by Segye Ilbo. The agency has distributed operating manuals and is training officers to transfer and manage the assets. Cryptocurrencies seized during investigations will remain in custody until they are returned to owners, provisionally released or transferred to prosecutors when a case is referred.

Upbit will store assets in cold wallets disconnected from the internet, with physical devices kept at separate secure facilities. Its custody infrastructure uses multi-party computation and distributed key generation to divide control of cryptographic keys. Transactions also require multiple authorizations. The company will provide round-the-clock technical support, assist with transfers between blockchain networks and pay associated transaction fees. Under the agreement, it will compensate police for 100% of losses involving assets in its custody. Privacy-focused cryptocurrencies such as Monero are excluded and will continue to be held in separate hardware wallets.

Dunamu, Upbit’s operator, won the one-year contract through a public procurement process. It was named preferred bidder on July 8 and selected as the final contractor on August 7, after receiving a technical evaluation score of 94.14 points. Some industry participants questioned whether tender requirements favored large exchange operators with established infrastructure. Police officials said the contract was awarded through fair competition.

The reform follows several security failures. In a 2021 Gwangju investigation into an illegal gambling website, police began seizing 1,798.3 Bitcoin. Segye Ilbo reported that someone who learned of the seizure used a mnemonic recovery phrase to withdraw funds, leaving investigators able to secure only 320.8 Bitcoin. Separately, Bitcoin transferred to the Gwangju District Prosecutors’ Office was lost in a phishing attack and later recovered. At Seoul’s Gangnam Police Station, 22 Bitcoin went missing from a hardware wallet. The disappearance was confirmed in February 2026 during a nationwide inspection, and two suspects were later arrested in connection with the theft.