Upbit Parent Dunamu Wins South Korea Police Contract to Custody Seized Crypto

Highlights:

• Dunamu will manage seized police crypto through Upbit Custody under a one-year contract.
• The contract carries an earlier procurement value of 267 million won, about $195,000.
• Police require 24-hour monitoring and full compensation if custodial assets disappear.

South Korea’s National Police Agency has chosen the Upbit operator, Dunamu, to manage cryptocurrencies seized during police investigations. According to a report by local media outlet Maeil Business on August 7, the one-year custody deal establishes a system for the custody of assets recovered nationwide by police. Officials designed the project to improve security, lower transfer costs, and standardize secure storage procedures.

Dunamu Takes Charge of Police Crypto Custody

Under the agreement, seized digital assets will move into Upbit Custody, the company’s institutional storage service. The platform runs monitoring across nights, weekends, and public holidays. Moreover, its custody structure keeps assets in cold wallets isolated from the internet. The system also uses distributed key controls to reduce risks linked to single-key exposure.

In addition, the service applies multiparty computation and distributed key generation across its custody wallet infrastructure. It also supports multi-signature controls and separate wallets for different assets or purposes. Police therefore gain a more structured custody setup than earlier investigator-managed storage methods. Meanwhile, the contract places financial responsibility on the chosen provider.

Tender terms require full compensation if assets disappear while under custody. The National Police Agency also demanded immediate asset acceptance and round-the-clock response capability. The Public Procurement Service administered the competitive tender under those conditions. Earlier procurement records valued the one-year police project at 267 million won, roughly $195,000.

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Dunamu wins police seized-crypto custody deal.

Dunamu won the police agency's 1-year contract to store seized crypto via Upbit Custody, scoring 94.14 on…

What it means for global teams: pic.twitter.com/rsszSPGhug

— CoinEasy | Web3 Simplified (@Coiniseasy) August 7, 2026

Competitive Tender Put Large Providers Under Scrutiny

The company led the final evaluation after competing against seven custody and infrastructure companies. Procurement records showed a score of 94.73 during the July evaluation stage. The total included full marks for pricing and 84.73 points for technical criteria. Korea Digital Asset Custody followed with 91.29 points, while Hecto Wallet One scored 87.27.

However, some industry participants questioned whether the tender terms favored companies with larger operating platforms. Local custody officials said instant onboarding and full-loss guarantees created barriers for smaller specialist providers. However, the police rejected claims that officials had predetermined the result. The agency said the selection followed an open competitive process.

Dunamu first became the preferred negotiating bidder on July 8. Afterward, technical talks and due diligence led to the contract award. The police said the project should also reduce fees during transfers of seized assets. Moreover, centralized custody should simplify oversight as crypto-related investigations increase across the country.

Police also cited rising use of digital assets in voice phishing, drug trading, and illegal gambling cases. As seizures grow, authorities face greater pressure to standardize custody practices and reduce operational risks. Previous methods sometimes relied on investigator-held hardware wallets or temporary exchange accounts. 

Earlier Asset Losses Raise Pressure for Reforms

The new arrangement follows several incidents involving cryptocurrency held by South Korean authorities. In February, Gangnam Police Station confirmed that 22 Bitcoin had disappeared from a police wallet. Authorities valued the missing assets at nearly 2.1 billion won, or about $1.6 million. Investigators discovered unauthorized transfers during a nationwide review of seized digital assets.

Meanwhile, South Korea’s National Tax Service also changed its approach after another wallet security failure. In March, the agency moved toward licensed private custody after a reported $4.8 million loss. It created a task force to guide provider selection and review the full seized-asset process. Officials also required providers to carry insurance under the Virtual Asset User Protection Act.

South Korea's tax agency hunting for private crypto custodian after wallet seed phrase leak exposed seized assets.

• Government custody proves unreliable for confiscated crypto
• Sets precedent for outsourcing official digital asset storage

🔐 $BTC $ETH

— unhedged (@unhedgedx) March 20, 2026

Moreover, South Korean authorities have strengthened their investigative cooperation with blockchain specialists. In June, Chainalysis announced a partnership with the Korean National Police Agency. The agreement expanded earlier work with the Seoul Metropolitan Police Agency to the national level. It focused on improving investigations involving cryptocurrency-related crime and blockchain transaction tracing.