South Korea’s National Police Agency announced that seized cryptocurrencies will now be stored with Dunamu’s Upbit Custody service, ending a practice in which individual investigators managed hardware wallets. The shift follows a series of incidents in which Bitcoin held by law‑enforcement agencies disappeared, prompting a nationwide overhaul of digital‑asset handling procedures.

BTC / USD
Source: CoinGecko. Prices are indicative.

Why the change was needed

Investigations in 2021 and early 2026 revealed serious gaps in the police’s internal custody process. In Gwangju, 1,798.3 BTC were seized during an illegal‑gambling probe, but only 320.8 BTC could be recovered after a mnemonic phrase was compromised. A separate case at Seoul’s Gangnam Police Station saw 22 BTC vanish from a hardware wallet despite the device remaining in police possession. According to local newspaper Segye Ilbo, the losses led to disciplinary action and a criminal probe into the unauthorized transfers.

Upbit Custody’s role and safeguards

Under the new contract, Upbit Custody will hold confiscated assets in offline cold wallets that are never connected to the internet. The service uses multi‑party computation, distributed key generation and multi‑signature technology, ensuring that no single individual can unilaterally move funds. Physical storage devices will be kept in separate secure facilities, and Upbit will provide round‑the‑clock technical assistance and cover all transaction fees associated with transfers. The company also guarantees compensation for any loss of assets placed in its custody, a commitment outlined in the agreement reported by Segye Ilbo.

Scope and limitations

The arrangement covers major cryptocurrencies such as Bitcoin, Ethereum and other mainstream tokens, but privacy‑focused assets like Monero are excluded and will continue to be managed with traditional hardware wallets. Once a criminal case proceeds to prosecution, the seized crypto will be transferred to an account linked to the prosecutorial authority. Police units have received operating manuals and training to use the new system, and the nationwide rollout follows Dunamu’s selection as the custody contractor in August after a public procurement process.

What to watch next

Observers will monitor how quickly police departments adopt the Upbit Custody platform and whether the new safeguards prevent further losses. The effectiveness of the multi‑signature and distributed‑key model may influence other jurisdictions considering outsourced crypto custody for law‑enforcement evidence. Additionally, any future policy updates from South Korea’s Supreme Court regarding asset seizure rules could expand or modify the range of tokens covered by the service.