Dunamu wins $195,000 South Korean police crypto custody deal

A Dunamu representative said the company would apply its security technology and operational controls to support public safety and digital policing infrastructure.

Industry officials questioned whether the tender requirements favored larger market operators. According to local media reports, bidders had to accept immediate custody of seized cryptocurrencies, maintain a round-the-clock response system and guarantee full compensation if assets were lost through hacking. Several custody industry officials told local media those conditions were easier for a large exchange operator with established infrastructure to meet than for standalone custody providers. One official described competing under those conditions as difficult from the outset.

The National Police Agency rejected suggestions that the outcome had been predetermined. The agency told local media the contractor was selected through a fair competitive process.

The police custody project follows multiple incidents of missing cryptocurrencies held by South Korean authorities. In February, Seoul's Gangnam Police Station confirmed that 22 Bitcoin worth about 2.1 billion won, or roughly $1.6 million, had disappeared from police custody. The coins had been surrendered during a 2021 investigation. Investigators discovered during a nationwide review that they had been transferred from the storage wallet without authorization. Police said the physical cold wallet remained in their possession, suggesting the private keys had been accessed even though the storage device had not been removed. The Gyeonggi Northern Provincial Police Agency opened an internal investigation examining access logs, key management procedures and blockchain transaction records.

Attention had already turned to law enforcement's handling of digital assets after an earlier case involving the Gwangju District Prosecutors' Office, where local reports said 320 Bitcoin seized in a criminal investigation was lost. Local media also reported another incident in 2022 in which police confirmed that seized Bitcoin had gone missing.

Following those incidents, South Korean authorities moved to place custody responsibilities with an external institution capable of maintaining dedicated security controls for seized digital assets. The finalized agreement now places those assets under Upbit Custody for the next year while the National Police Agency oversees the arrangement under the terms of the awarded contract.