What to know:
- Dunamu leads the police crypto custody bid for seized digital assets in South Korea.
- Contract requires 24-hour response, immediate custody, and hacking loss compensation.
- Smaller custody firms question tender terms as police defend a fair selection process.
Dunamu, the operator of South Korea’s Upbit exchange, has been selected as the preferred bidder for the Korean National Police Agency’s seized digital asset contract. The one-year deal covers crypto custody for assets confiscated during police investigations.
The procurement records show that Dunamu was the top bidder. Seized cryptocurrencies will be handed over from police custody to an external entity within the project. Dunamu will secure the deal if talks are completed successfully.
Also Read: Polymarket Enables Instant Bitcoin Deposits With Spark Integration
What Put Dunamu Ahead in Crypto Custody Bid
The procurement platform showed Dunamu received 10 points for its bid price. It also scored 84.73 points in the technical review, and the overall score was 94.73.
Korea Digital Asset Custody (K-DAC) came in second at 91.29 points. Hecto Wallet One came in 3rd place with 87.27 points. The scoring placed Dunamu in the preferred negotiating position.
The crypto custody contract is worth 267 million won or approximately $195,000. It will operate for a duration of 1 year. The topics include the storage and management of digital assets during criminal investigations.
Following the result, industry participants expressed concern. Some doubted the effect tender terms would have on smaller crypto custodians’ competitiveness. According to the local media, the requirements were oriented towards companies that had bigger systems.
The National Police Agency had asked the bidders to take full custody of the cryptocurrencies seized immediately. They also had to have a 24-hour response system. The bidders were required to pay full compensation for assets lost due to hacking.
Smaller Crypto Custody Firms Raised Concerns
Industry players have told local media those conditions were acceptable for the security of government-held assets. The regulations still posed a challenge to standalone crypto custody companies, they said. Dunamu already operates a major exchange infrastructure.
The competition “wasn’t an easy game from the start,” said one custody industry official. The comment was a reaction to the competition between the large and smaller service providers. It also reported pressure on smaller companies.
The evaluation process was also criticized by the market participants. Local media reported that Dunamu may have been assessed favorably because of its 24-hour exchange operations. That experience was also seen as an advantage.
Reports said a proposed on-site inspection was not included in the evaluation. That inspection would have included review of competing companies’ security systems and operational infrastructure. The omission was seen as a missed opportunity by participants.
Why Dunamu Faces Scrutiny Beyond Custody Deal
The National Police Agency denied that the outcome was predetermined to benefit a big business. The agency has responded to local media, saying that they have a proper selection procedure. The operator has been selected through a fair competitive process, it said.
The decision comes after previous issues with seized cryptocurrencies. Local reports said external crypto custody drew more attention after Bitcoin seized by the Gwangju District Prosecutors’ Office was lost. Police also said that during another incident in 2022, Bitcoin seized by the police was lost.
Dunamu also faces another regulatory delay. The company also revealed that the all-stock share swap with Naver Financial has been delayed again until Dec. 31. Dunamu said several regulatory approvals remain pending.
Also Read: Uniswap Integrates Sky’s LitePSM For Stablecoin Routing 2026
Be the first to comment