South Korea’s National Police Agency (KNPA) has drafted its first comprehensive guidelines for managing seized cryptocurrencies, including privacy-focused assets often referred to as “dark coins,” as authorities seek to strengthen oversight following repeated losses of confiscated digital assets.
According to a report by Asia Economy on March 17, the directive outlines compliance requirements across every stage of virtual asset seizure, storage, and management
Notably, it introduces, for the first time, specific measures for handling software wallets, or “hot wallets,” which are required to manage privacy-centric cryptocurrencies.
Unlike conventional cryptocurrencies such as Bitcoin, where transaction records are publicly verifiable on blockchain networks, privacy coins are designed to obscure transaction details. These assets can conceal sender and receiver identities as well as transaction amounts, making them significantly harder to trace. This anonymity has led to their frequent use in illicit activities, including cybercrime and money laundering.
One high-profile example cited is the Nth Room case, in which digital assets were used to facilitate illegal payments tied to the distribution of exploitative content. The case involved Cho Joo-bin, who operated a criminal network on Telegram.
The new guidelines also reflect broader concerns about the misuse of privacy coins by state-backed actors. Authorities have previously pointed to North Korean government entities leveraging such assets to launder funds obtained through cyberattacks and crypto hacks.
Under the updated framework, investigators handling standard cryptocurrencies typically rely on hardware wallets, or “cold wallets,” secured with cryptographic recovery phrases
However, privacy coins require dedicated software installed on secure systems, with private keys stored digitally rather than on physical devices, introducing new operational risks.
A KNPA spokesperson emphasized the need for structured protocols as investigative practices evolve
“In the past, seized assets were stored in warehouses. Now we must manage wallet addresses and private keys,” the official said.
The move signals a growing recognition among law enforcement agencies of the technical complexities involved in securing digital assets and the need for standardized procedures in an increasingly crypto-driven crime landscape.
Your web3 identity + services + payments in one single link. Get your pay3.so link today.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Encourage innovation! A U.S. judge bans Arizona’s regulation of prediction markets, and suspends the prosecution of Kalshi.
A U.S. federal district court ruled that Arizona is barred from using its gambling laws to prosecute prediction market platform Kalshi, finding that the federal Commodity Futures Trading Commission has exclusive jurisdiction. The decision affects the boundary between state and federal authority in financial market regulation, while Kalshi insists that its business is a financial product rather than traditional gambling. Rulings on prediction markets vary across states, and the Trump family has also expressed support for prediction markets.
CryptoCity13m ago
Solana cofounder toly: a base-layer stablecoin should be built that can only be frozen with authorization from the court
Solana co-founder toly noted that the industry needs a stablecoin that can only be frozen under a court order, opposing other freeze factors. He suggested that the protocol issue a stablecoin with custom freeze strategies on the base layer and strengthen security measures. This view stems from a recent response by Circle to the Drift protocol hack incident, sparking discussions about centralized stablecoins.
GateNews28m ago
Hong Kong’s first batch of stablecoin issuers has been unveiled! Out of 36 applications, only 2 received licenses: HSBC and TetherPoint Finance
The Hong Kong Monetary Authority has announced the inaugural stablecoin issuer licensing scheme, and Tidepoint Financial Technology, led by HSBC Bank and Standard Chartered Bank, has been approved. This regulatory framework is designed to protect users’ interests, promote the application of compliant stablecoins, address financial pain points, and drive the development of Hong Kong’s digital assets.
CryptoCity1h ago
Is it possible to bypass Financial Supervisory Commission regulations to buy crypto by card? Odingding rolls out a U.S. debit card crypto purchase service, Wallet Pro
OdinTin launches OwlPay and Wallet Pro services, focusing on B2B cross-border payments. By combining stablecoin technology with international financial systems, it demonstrates its fintech transformation. Through a partnership with MoneyGram, Wallet Pro enables cross-border transfers to buy stablecoins with cash and operates in the U.S. market. The company’s offshore model avoids Taiwan’s strict regulation, and under the new draft law, it challenges the market’s competitive landscape, which will affect local businesses’ compliance strategies in the future.
CryptoCity1h ago
Ondo Finance submits a letter to the U.S. SEC requesting no enforcement action, concerning on-chain record-keeping of tokenized securities rights on the rights chain
Ondo Finance filed a request with the SEC on April 13, seeking confirmation that recording securities interests on the Ethereum mainnet in a tokenized form is compliant under certain patterns. Ondo believes that this on-chain recording can improve collateral monitoring, optimize processes, and simplify reconciliations, with the goal of operating in coordination with traditional finance.
GateNews2h ago
Encourage innovation! U.S. judges ban Arizona state regulation of prediction markets, and halt the prosecution of Kalshi
A U.S. federal district court ruled that Arizona is barred from using its gambling laws to prosecute prediction market platform Kalshi, finding that the U.S. Commodity Futures Trading Commission has exclusive jurisdiction. The ruling affects the boundary between state and federal authority over financial market regulation, and Kalshi insists that its business is a financial product rather than traditional gambling. Courts in different states have reached different decisions regarding prediction markets, and the Trump family has also expressed support for prediction markets.
CryptoCity3h ago
