Dunamu has secured a one-year contract to take custody of digital assets seized by South Korea’s National Police Agency after winning the agency’s public tender process.
Summary
- Dunamu has won a one year contract to custody digital assets seized by South Korea’s National Police Agency.
- Seized cryptocurrencies will be stored through Upbit Custody using offline cold wallets and round the clock monitoring.
- The police tender followed earlier incidents in which Bitcoin held by South Korean authorities went missing.
- Dunamu received the highest technical evaluation before securing the final contract after negotiations.
- The custody platform uses MPC, DKG and multi signature security with separate wallets for different asset types.
According to a statement released by Dunamu on Aug. 7, the Upbit operator was named the final winner of the Korean National Police Agency’s project to store and manage confiscated digital assets following technical negotiations that concluded the procurement process.
The announcement completes a bidding process that began earlier this year, with the company moving from preferred bidder status to the final contractor after negotiations with the police agency. The one-year agreement will place seized cryptocurrencies from police investigations under Dunamu’s custody platform.
Upbit Custody will manage seized crypto assets
Procurement documents show the contract was awarded through an open competitive tender administered by South Korea’s Public Procurement Service. Dunamu said it received the highest technical evaluation score of 94.14 before being selected as the final contractor. The company had previously been designated as the preferred negotiating bidder on July 8.
Earlier procurement records valued the contract at 267 million won, or about $195,000, for one year of custody and management services covering digital assets confiscated during criminal investigations.
Under the agreement, seized cryptocurrencies will be stored and managed through Upbit Custody, Dunamu’s digital asset custody service. According to the company, the platform operates within a 24-hour, 365-day monitoring system that continues running during nights, weekends, and public holidays so custody operations remain uninterrupted.
The custody platform also uses a security environment built around 100% offline cold wallets that remain isolated from the public internet. According to Dunamu, its infrastructure incorporates Multi-Party Computation (MPC), Distributed Key Generation (DKG), multi-signature technology and wallet segregation, allowing assets to be separated according to their type and intended use while reducing the risks associated with a single compromised private key.
A Dunamu representative said the company would use its security technology and operational controls to support the stability of South Korea’s public safety and digital policing infrastructure.
Police custody contract followed competitive bidding
Before becoming the final contractor, Dunamu ranked first during the evaluation stage of the tender process.
Procurement records released in July showed the company received a combined score of 94.73, including full marks for its bid price and 84.73 points in the technical assessment. Korea Digital Asset Custody (K-DAC) finished second with 91.29 points, while Hecto Wallet One placed third with 87.27 points.
Industry participants questioned whether the tender requirements favored larger market operators. According to local media reports published at the time, bidders were required 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 requirements were easier for a large exchange operator with an established infrastructure to satisfy than for standalone custody providers. One industry official described competing under those conditions as difficult from the outset.
The National Police Agency, however, rejected suggestions that the outcome had been predetermined. According to local media, the agency said the contractor had been selected through a fair competitive process.
Previous Bitcoin losses increased focus on digital asset custody
The police custody project comes after multiple incidents involving missing cryptocurrencies held by South Korean authorities.
In February, South Korea’s Gangnam Police Station confirmed that 22 Bitcoin worth approximately 2.1 billion won, or about $1.6 million, had disappeared from police custody. Authorities said the coins had originally been surrendered during a 2021 investigation before 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 itself had not been removed. The Gyeonggi Northern Provincial Police Agency subsequently 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.
Against that backdrop, 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.
