South Korea’s finance minister has pledged reforms to strengthen how government agencies manage seized cryptocurrency, following a digital asset information leak involving the National Tax Service.
Summary
- South Korea’s finance minister announced a full inspection of digital assets held by public institutions through seizure and tax enforcement.
- The review follows a National Tax Service data leak and past incidents where police lost access to seized Bitcoin due to custody failures.
- Authorities plan to strengthen digital asset security management and implement safeguards to prevent future breaches.
Seized Bitcoin under scrutiny as South Korea tightens digital asset controls
In a statement posted on social media, the minister said the government will work with the Financial Services Commission and the Financial Supervisory Service to conduct a full inspection of digital assets held by public institutions through legal enforcement measures such as seizures from tax delinquents.
The review will assess the current status and management practices of those holdings and introduce measures to prevent future incidents, including tighter digital asset security controls.
“Together with relevant agencies such as the Financial Services Commission and the Financial Supervisory Service, the government will inspect the current status and management practices of digital assets held and managed by government and public institutions through seizure and other enforcement measures,” Koo said on X.
The minister clarified that the government does not actively invest in or hold cryptocurrency beyond assets acquired through legal enforcement processes.
The move comes after past security lapses raised concerns about how authorities safeguard confiscated crypto. South Korean police lost access to Bitcoin seized in 2021 after relying on a third-party custodian without maintaining control of private keys, exposing weaknesses in custody oversight.
The issue only came to light following an internal probe, drawing criticism over law enforcement’s digital asset handling procedures.
Authorities later arrested two suspects accused of stealing Bitcoin from wallets linked to seized assets, further highlighting vulnerabilities in state-managed crypto storage.
With digital asset seizures becoming more common in tax enforcement and criminal investigations, the latest review signals an effort to standardize custody practices and reinforce accountability. The government’s inspection is expected to evaluate storage methods, access controls, and inter-agency coordination to reduce operational risks tied to holding volatile and technically complex assets.
The finance minister said reforms would be implemented promptly once the review is complete, aiming to restore confidence in the state’s ability to securely manage seized digital assets.
Source: https://crypto.news/south-korea-to-review-crypto-seizure-after-lapses/
