South Korean cryptocurrency exchange Upbit’s operator, Dunamu, has emerged as the preferred bidder to manage digital assets seized by the country’s police, a step in the government’s efforts to improve the handling of confiscated cryptocurrencies.
Procurement records published by South Korea’s Public Procurement Service show Dunamu ranked first in the bidding process for a one-year custody contract issued by the Korean National Police Agency (KNPA). If final negotiations are completed successfully, the company will become the official custodian of cryptocurrencies seized during police investigations.
The contract is valued at 267 million won, or about $195,000, and covers the secure storage and management of confiscated digital assets.
Dunamu tops technical and price evaluation
Dunamu secured the highest overall score in the procurement process after receiving the maximum 10 points for its bid price and 84.73 points in the technical assessment, giving it a total score of 94.73.
Korea Digital Asset Custody (K-DAC) finished second with 91.29 points, while Hecto Wallet One ranked third with 87.27 points.
As the preferred negotiating bidder, Dunamu will be awarded the contract if negotiations conclude successfully, without the need to move to lower-ranked bidders.
Why did smaller crypto custody firms raise concerns?
The bidding process has drawn criticism from some industry participants, who argued that the contract requirements favoured large exchange operators over independent custody providers.
According to local reports, bidders were required to immediately take custody of seized cryptocurrencies, operate a 24-hour response system, and provide full compensation if assets were lost due to hacking or other security incidents.
Several industry officials said these conditions were necessary to protect government-held digital assets, but were easier for a major exchange such as Dunamu to meet given its existing infrastructure and resources.
One custody industry official reportedly said competing against a large exchange under those conditions was difficult from the beginning.
What led to the new custody contract?
Some industry participants also questioned the evaluation process, saying proposed on-site inspections of bidders’ security systems and operational facilities were not included in the final assessment.
The National Police Agency rejected claims that the process favoured a large company, stating that Dunamu was selected through a fair, competitive bidding process.
The move comes after previous incidents involving seized cryptocurrencies. Local reports noted that Bitcoin confiscated by the Gwangju District Prosecutors’ Office was previously lost, while another case in 2022 also involved missing seized Bitcoin held by police.
Separately, Dunamu continues to face regulatory review over its planned all-stock share swap with Naver Financial. Earlier this month, the company said the transaction had been delayed for a second time until December 31 as it awaits regulatory approvals.
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