Dunamu Wins South Korean Police Custody Contract
Dunamu, the operator of Upbit, has been named the final winner of South Korea’s National Police Agency project to store and manage confiscated digital assets. The company announced on Aug. 7 that it secured a one-year contract after technical negotiations concluded the procurement process.
The bidding process began earlier this year. Dunamu moved from preferred bidder status to final contractor after negotiations with the police agency. The contract was awarded through an open competitive tender administered by South Korea’s Public Procurement Service. Procurement records cited a contract value of about $195,000 for one year of custody and management services covering digital assets confiscated during criminal investigations.
Technical evaluation and bid details
Dunamu received the highest technical evaluation score of 94.14 before being selected. It had previously been designated as the preferred negotiating bidder on July 8. Procurement records from July showed 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.
Upbit Custody to Manage Seized Crypto Assets
Under the agreement, seized cryptocurrencies will be stored and managed through Upbit Custody, Dunamu’s digital asset custody service. The platform operates within a 24-hour, 365-day monitoring system that continues during nights, weekends, and public holidays to keep custody operations uninterrupted.
Dunamu says the custody platform uses a security environment built around 100% offline cold wallets isolated from the public internet. Its infrastructure incorporates Multi-Party Computation (MPC), Distributed Key Generation (DKG), multi-signature technology, and wallet segregation. These measures allow assets to be separated according to type and intended use while reducing the risks associated with a single compromised private key.
A Dunamu representative said the company would apply its security technology and operational controls to support the stability of South Korea’s public safety and digital policing infrastructure.
Competitive Tender Raised Industry Questions
Dunamu ranked first during the evaluation stage before becoming the final contractor. Local media reports at the time noted that 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 said those requirements were easier for a large exchange operator with 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 rejected suggestions that the outcome was predetermined, saying the contractor had been selected through a fair competitive process.
Previous crypto losses increased scrutiny
The police custody project follows multiple incidents involving missing cryptocurrencies held by South Korean authorities.
- In February, Gangnam Police Station confirmed that 22 Bitcoin worth approximately 2.1 billion won, or about $1.6 million, had gone missing. The coins had originally been surrendered during a 2021 investigation, and investigators later 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 private keys had been accessed even though the storage device had not been removed. Gyeonggi Northern Provincial Police Agency opened an internal investigation examining access logs, key management procedures, and blockchain transaction records.
- In an earlier case, local reports said 320 Bitcoin seized by the Gwangju District Prosecutors’ Office 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 custody responsibilities to an external institution capable of maintaining dedicated security controls for seized digital assets. The finalized agreement 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.
