South Korea's National Tax Service to seize crypto assets in cold wallets

South Korea’s  National Tax Service (NTS) warned crypto tax evaders that cold wallets are not beyond its reach. The regulator has vowed to conduct home searches as part of its ongoing crackdown on tax evasion.

The enforcement follows the authorities’ struggle to trace assets hidden in overseas exchanges and private storage devices. As of the end of June, the number of South Korean investors in virtual assets has nearly doubled from 1.2 million five years ago to 10.77 million.

National Tax Service intensifies efforts to seize crypto assets

Handkook Ilbo, a local news outlet, reported that cryptocurrency has become one of the major assets often used to evade taxes in South Korea. The local report claimed that tax evasion occurs because virtual assets are based on anonymity, and tracking cryptocurrency owners is more challenging than tracking financial transactions, such as stock purchases. 

According to the report, the South Korean NTS is prepared to inspect homes and seize hard drives and cold wallet devices. The NTS will seize hard drives and cold wallets if it suspects tax evaders are hiding their crypto holdings offline. In 2021, the NTS collected 71.2 billion won by seizing virtual assets from 5,741 high-value defaulters for the first time. The National Tax Collection Act gives the NTS the authority to request account information from local exchanges and freeze the accounts of tax delinquents.

According to the report, the NTS can seize digital assets from South Korean defaulters. The regulator can approach exchanges operating locally to obtain KYC information of defaulters to seize their assets. The inquiry is made in accordance with the “Question and Inspection Rights” as outlined in the National Tax Collection Act. If the defaulters’ accounts are found to hold digital assets, the regulator can request that the Exchange freeze the account.

According to Rep. Kim Young-jin of the Democratic Party of Korea, data from the NTS exposed a total of 14,140 delinquents who have had their virtual assets seized. The data showed that in the last four years, NTS seized 146.1 billion won of virtual assets.

Financial Supervisory Service revealed the amount of virtual assets transferred from domestic exchanges to cold wallets stood at 78.9 trillion won as of the first half of this year.

South Korea records a surge in crypto crime reports.

As Cryptopolitan reported on September 22,  Korean Financial Intelligence Unit (FIU) statistics showed the number of suspicious transaction reports (STRs) filed by virtual asset operators between January and August this year reached 36,684. FIU revealed that the figure exceeded the combined total of 35,734 cases over the past two years.

FIU also revealed that the STRs filed between January and August surpassed the combined totals of 2023 and 2024, with STRs at 16,076 and 19,658, respectively. Korea Customs Service revealed that from August 2021 to August 2025, the scale of virtual asset-related crimes reached KRW 9.5613 trillion. Among the crimes, the scale of money laundering-type crimes was 8.6235 trillion won, accounting for 90.2% of the total. In May, the KCS caught a money changer who had illegally transferred approximately 57.1 billion won in cash, obtained from a Russian importer, into Tether.

Jin added that related organizations, such as the KCS and the FIU, should establish systematic measures against new types of foreign exchange crimes. He emphasized that the measure should be accompanied by effective crackdowns, such as tracking criminal funds and blocking disguised remittances.

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