Virtual Assets Also Subject to Seizure and Cash Conversion for Compulsory Execution... Supreme Court Legislative Notice

Virtual Assets Also Subject to Seizure and Cash Conversion for Compulsory Execution... Supreme Court Legislative Notice

Push for partial amendment of Civil Execution Rules... To be implemented from October

The court's compulsory execution procedures, including seizure, sale, and cash conversion, which reflect the transaction structure of virtual assets such as Bitcoin, will be concretized.

According to legal circles on the 5th, the Supreme Court issued a legislative notice on the 'Partial Amendment to the Civil Execution Rules' containing these details on the 2nd.

This amendment systematizes the compulsory execution procedures, including the debtor's virtual assets and the right to claim transfer from exchanges.

Going forward, if a court issues a seizure order for virtual assets deposited with an exchange, the disposal of those assets will be prohibited, and exchanges must transfer them to an enforcement officer.

The effect of seizure will occur from the moment the enforcement officer takes over the virtual assets.

The procedure for converting seized virtual assets into cash has also been concretized.

Upon the creditor's application, the court can directly transfer virtual assets to the creditor or order the enforcement officer to sell them.

The enforcement officer can create a dedicated account on the exchange, receive the assets, and then sell them at market price or entrust the sale to the exchange.

For assets difficult to convert into cash, a procedure has also been established to allow them to be exchanged for actively traded major virtual assets, such as Bitcoin, and then sold.

In addition, to prevent debtors from siphoning off coins to other wallets during a lawsuit, preservation procedures such as provisional attachment and provisional disposition prohibiting disposal have been newly established.

Through preservation measures, creditors can secure a legal basis to freeze the debtor's electronic wallet before the judgment becomes final.

In cases where an application for compulsory execution related to virtual assets is withdrawn, or the decision to cancel the execution procedure becomes effective, the corresponding processing procedures have also been stipulated.

The National Court Administration plans to gather opinions on the amendment until the 11th of next month and then fully implement it from October.

The Supreme Court explained, "Cases where virtual assets are subject to execution in civil enforcement procedures are increasing," and "It is necessary to establish procedures that conform to the legal nature and transaction structure of virtual assets, and through this, we aim to unify execution procedures in courts of all levels and secure predictability and legal stability."