South Korea puts crypto exchanges on a seven-day clock under new seizure rules

South Korea is nearing an Aug. 11 deadline for public comments on proposed crypto seizure rules that could give exchanges just seven days to disclose customer holdings once served with a court order.

The Supreme Court’s proposed amendments to the Civil Execution Rules would create a standardized process for creditors to freeze, identify and liquidate virtual assets held by debtors. If finalized on the current timetable, the rules are expected to take effect Oct. 1.

That would leave exchanges and other virtual asset service providers roughly seven weeks after the consultation closes to prepare for a more formal role in civil debt enforcement.

For crypto held through a custodian, a court could attach the debtor’s right to receive the assets rather than initially seizing the coins themselves. Once served, the provider would be barred from transferring the corresponding assets to the debtor, who would also lose the ability to dispose of the claim.

Creditors could then ask the court to require the provider to disclose what it holds. The exchange would have one week to state whether it recognizes the debtor’s claim, identify the type and quantity of assets, and disclose competing seizures, provisional orders, or priority rights.