A Crypto-Sector Court Agreement: A step forward to legal cooperation in South Korea

By the decision of the South Korean courts, crypto holdings are now to be included within the debtor’s list of assets in relation to bankruptcy proceedings. This happened after a legal precedent was set in November 2021, which recognised that an individual’s bitcoin has value as a form of property of that respective individual.

In this regard, the courts have reiterated many times their concerns that individuals/debtors are able to conceal and expropriate their actual financial holdings by purchasing crypto assets, in default of their creditors.

Now, South Korea’s leading crypto exchanges have agreed to cooperate with the Seoul Bankruptcy Courts, namely Upbit, Bithumb, Coinone, Gopax, and Korbit for the purpose of cooperating and granting the courts the ability to give bankruptcy trustees investigative powers over the debtors’ crypto assets in cases of bankruptcy, which will then eventually be disposed of and distributed to the debtors’ creditors as necessary.

This cooperation deal is seen as a landmark achievement, considering that no crypto-related firm has ever signed a cooperation deal with a domestic legal body, and it is reported that similar crypto-sector court agreements could follow.

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