Detailed Procedures Established for Compulsory Enforcement of Virtual Assets... Seized Coins Allowed to Be Converted and Sold as Bitcoin

Supreme Court Announces Proposed Amendment to Civil Execution Rules
Full Implementation Set for October
Mandatory Seizure of Exchange-Held Assets and Transfer to Bailiffs

The enforcement system for virtual assets, including Bitcoin—covering court-ordered seizure, sale, and conversion into cash—will be established in detail through concrete legislation.

According to the legal community on July 5, the Supreme Court issued a legislative notice on July 2 for a partial amendment to the Civil Execution Rules, which systematizes judicial enforcement procedures for virtual assets. Notably, this amendment institutionalizes the process of compulsory execution by including not only the virtual assets owned by the debtor, but also the right to claim transfer against virtual asset exchanges and similar entities, as subjects of enforcement.

Under the amendment, if the judiciary issues a seizure order for a specific virtual asset, any disposition of the asset will be completely prohibited, and custodial institutions such as exchanges must transfer the virtual assets to the bailiff. The legal effect of the seizure commences the moment the bailiff takes possession of the virtual asset.

The process for converting seized assets into cash is also clearly prescribed. At the creditor’s request, the court can issue a transfer order to hand the virtual asset directly to the creditor or instruct the bailiff to sell the asset. The bailiff, upon receiving such an order, can open a dedicated account at an exchange to receive the asset, then sell it at market price, or delegate the sale process to the exchange.

For assets that are difficult to convert into cash directly on the market, supplementary procedures are in place, allowing them to be exchanged for major virtual assets with active trading, such as Bitcoin, before being sold.

In addition, new provisions have been established for preservation measures, such as provisional seizure and injunctions prohibiting disposition, to prevent debtors from hiding or dispersing assets by transferring them to other electronic wallets while a trial is in progress. This enables creditors to secure a legal means to freeze a debtor’s electronic wallet even before the court’s final ruling is confirmed.

Furthermore, the rules stipulate follow-up procedures in cases where an application for compulsory enforcement against virtual assets is withdrawn or the enforcement is canceled. The Court Administration Office plans to collect public opinions until August 11 and fully implement the revised rules starting in October.

The Supreme Court stated, “Cases in which virtual assets are being targeted for enforcement in civil procedures are increasing,” adding, “It is necessary to establish procedures that align with the legal nature and trading structure of virtual assets, and through this, we aim to unify enforcement procedures across all levels of courts while ensuring predictability and legal stability.”

This content was produced with the assistance of AI translation services.