South Korea Supreme Court Moves to Formalize Crypto Seizure and Liquidation Rules

South Korea’s Supreme Court has moved to formalize how crypto assets can be seized and liquidated in civil enforcement proceedings, a step that could tighten legal certainty around digital assets at a time when on-chain security incidents and institutional participation are reshaping market structure.

According to PANews, the Supreme Court on Wednesday UTC (July 2) issued a legislative notice for amendments to the Civil Execution Rules, opening a public comment period through August 11 ahead of an implementation date of October 1. The proposal lays out court procedures for seizing both a debtor’s claim to transfer crypto and the crypto assets themselves, alongside mechanisms to restrict disposal and convert seized assets into cash.

Under the draft, once a court’s seizure order becomes effective, a ‘third-party debtor’—such as an intermediary holding the assets—would be restricted from transferring the crypto, while the debtor’s ability to dispose of related rights would be limited. The court would also be able to monetize seized holdings through either a transfer order or a sale order. Proposed sale methods include entrusting liquidation to a virtual asset service provider (VASP), transferring assets to an enforcement officer’s account for sale, or swapping into a highly liquid crypto asset before selling—an acknowledgment that liquidity, slippage, and execution venue matter when converting digital assets into fiat.

The rulemaking effort arrives amid a wave of security concerns across Web3. Web3 security firm CertiK said its “Hack3D 2026 H1 Report” recorded 344 incidents in the first half of the year with losses of roughly $1.32 billion, according to Odaily. Excluding last year’s $1.45 billion Bybit hack, CertiK assessed that losses still rose about 28% year-over-year, with wallet compromises accounting for the largest share at about $450 million. While phishing incidents fell in count, CertiK said attacks increasingly targeted ‘high-net-worth’ victims and institutions, limiting the reduction in dollar losses.

Code vulnerabilities were the most frequent attack vector, with 204 incidents. CertiK added that long-running smart contracts that have not undergone re-audits are becoming prime targets—an observation that echoes industry concerns about “audit drift,” where code changes, integrations, or evolving threat models erode the protective value of older reviews. CertiK also pointed to two large incidents tied to Kelp DAO and Drift Protocol, which it said accounted for about $577 million—or roughly 44%—of total losses in the period.

Separate reporting from PANews said Coinspect Security warned that a wallet-generation weakness dubbed ‘Ill Bloom’ is being actively exploited, leaving thousands of accounts exposed across Bitcoin (BTC), Ethereum (ETH) and multiple layer-2 networks, Tron, and Solana (SOL). Coinspect said the issue has affected multiple wallets since 2018 and was not confined to a single software wallet implementation, adding that vulnerable wallets were reportedly still being created until weeks ago. Coinspect estimated that around $3 million had been stolen from hundreds of accounts as of May 27, with a further roughly $2 million transferred out from exposed wallets within recent hours. The firm released a tool to help users identify affected addresses and urged wallet providers to integrate detection features for vulnerable mnemonic phrases.

Meanwhile, Blockaid monitoring flagged that Summer.fi was under attack, with approximately $6 million stolen so far, though details of the exploit and whether additional losses are expected were not immediately disclosed.

On the market infrastructure side, stablecoin usage accelerated in June. Wu Blockchain, citing Visa on-chain analytics, reported that adjusted stablecoin transaction volume reached $1.79 trillion in June—up 63% from May’s $1.10 trillion and slightly above February’s $1.78 trillion. USD Coin (USDC) accounted for about $1.21 trillion, or roughly 67% of the total, while Tether (USDT) represented about $576 billion, or around 32%.

By network, Base led with approximately $565 billion in volume, narrowly ahead of Ethereum at $562 billion, while Tron ranked third—figures that underscore how stablecoin rails are increasingly spread across both major L1s and high-throughput L2s, with shifting venue preferences influencing fees, settlement speed, and liquidity routing.

Corporate and institutional accumulation headlines also continued. Bitcoin Magazine reported that American Bitcoin—reported to involve Eric Trump—added 500 BTC, pushing its holdings above 8,000 BTC. The purchase adds to a broader trend of companies treating Bitcoin treasury positions as a long-duration exposure to ‘digital store-of-value’ narratives, while also increasing sensitivity to drawdowns and custody risk management.

Odaily separately reported that Bitcoin financial services firm Strike said it bought an additional 17.76 BTC last week, bringing total holdings to 19,882 BTC. CEO Matt Cole wrote on X that the company added 6,236 BTC in total during the second quarter of 2026, citing a 24% Bitcoin yield for the period and a net increase of 3,264 BTC in holdings.

In capital markets, Figure Technology Solutions is seeking to raise $600 million through a senior secured note offering to eligible institutional investors, Odaily reported. Proceeds are expected to fund the cash portion of its planned acquisition of AI-based real estate lending platform Kiavi, alongside general corporate purposes and issuance costs, with final terms dependent on market conditions.

ETF flows were also in focus. Odaily, citing Sosovalue data, said spot XRP exchange-traded funds recorded net inflows of $17.19 million from June 28 through July 2 U.S. Eastern Time. The largest weekly inflow was into the Bitwise XRP ETF at $7.919 million, bringing cumulative net inflows to $501 million. The Canary XRPC ETF drew $6.3886 million over the same period, lifting cumulative net inflows to $467 million. Total spot XRP ETF net assets were reported at $988 million, representing about 1.47% of XRP’s overall market capitalization, with cumulative net inflows totaling $1.49 billion.

Finally, on-chain data pointed to potential shifts in exchange-side supply. Odaily cited Lookonchain as reporting that a whale address withdrew 14,267 ETH—worth roughly $25.3 million—from Binance. Large exchange outflows are often read as a reduction in immediate sell-side pressure, although analysts typically caution that single-wallet movements can reflect custody reshuffling as much as directional positioning.

Taken together, the Supreme Court’s proposed enforcement framework highlights how legal systems are adapting to crypto’s growing footprint, while the industry wrestles simultaneously with ‘security externalities’ and expanding institutional rails—from stablecoins to ETFs—that are reshaping liquidity and risk across the market.