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South Korea’s National Tax Service (NTS) has intensified its campaign against crypto tax evasion, announcing that even assets stored in offline cold wallets will not escape government scrutiny. The move marks a significant expansion of the South Korea crypto tax regime, as authorities seek to close loopholes exploited by digital asset holders.
According to a report from Hankook Ilbo, the NTS has begun employing advanced tracking software to analyze digital currency transactions and identify potential cases of tax evasion. If investigators suspect that individuals are concealing their holdings in offline storage, the agency said it will conduct home searches and seize the devices.
“We analyze tax delinquents’ coin transaction history through crypto-tracking programs, and if there is suspicion of offline concealment, we will conduct home searches and seizures,” — NTS spokesperson, in a statement to Hankook Ilbo.
Under the National Tax Collection Act, the NTS has broad authority to request account information from domestic exchanges, freeze delinquent users’ accounts, and liquidate seized crypto assets to recover unpaid taxes. The warning reinforces the government’s determination to make South Korea crypto tax enforcement comprehensive, extending beyond centralized platforms to personal storage devices.
The heightened scrutiny comes amid South Korea’s rapid growth in crypto adoption and trading. The number of digital asset investors in the country surged to nearly 11 million as of June 2025, up from just 1.2 million in 2020 — a growth of nearly 800%. During the same period, trading volumes ballooned from 1 trillion won (about $730 million) to 4.7 billion won ($3.4 billion), according to Hankook Ilbo.
Officials say the expansion of South Korea crypto tax enforcement reflects both the growing popularity of digital assets and the rising number of tax evasion cases. The NTS first began targeting crypto holdings in 2021, when it confiscated roughly $50 million worth of digital assets from 5,700 individuals suspected of evading taxes.
Over the past four years, the agency has seized and liquidated approximately $108 million in cryptocurrency from more than 14,000 people, highlighting the increasing role of digital assets in tax collection.
“This new phase in enforcement is about ensuring fairness,” — unnamed NTS official, quoted by Hankook Ilbo. “Crypto investors who profit from digital assets must contribute their fair share under the South Korea crypto tax system.”
Cold wallets devices or storage systems disconnected from the internet have long been considered one of the safest methods for storing crypto. Their offline nature makes them resistant to hacking and phishing attacks. However, they also present a challenge for tax authorities attempting to trace and recover hidden wealth.
By announcing plans to target cold wallets, the NTS is signaling that physical seizures could become a standard enforcement tool in its South Korea crypto tax efforts. The agency has confirmed it will collaborate with law enforcement to identify locations where suspected tax delinquents might store such devices.
Analysts say the measure could serve as a deterrent to investors attempting to hide funds offline. However, privacy advocates argue that home searches may raise concerns over personal data protection and the limits of government authority in digital asset enforcement.
The escalation of the South Korea crypto tax campaign comes amid record levels of suspicious crypto transaction reports. Data from the Financial Intelligence Unit (FIU) showed that virtual asset service providers (VASPs) filed nearly 37,000 suspicious transaction reports (STRs) as of August 2025, surpassing the combined totals of 2023 and 2024.
STRs are a key component of South Korea’s Anti-Money Laundering (AML) framework, allowing authorities to flag potentially illicit financial activity. The FIU attributed the rise to both improved monitoring tools and a growing number of unregistered exchanges and wallet services.
With the South Korea crypto tax framework expanding to include cold wallet seizures and enhanced reporting, policymakers aim to establish a transparent, accountable environment for digital assets even as the industry’s growth accelerates.
“The NTS and FIU are stepping up coordination to ensure that tax compliance and financial integrity move hand in hand,” NTS statement, quoted by Hankook Ilbo.
For crypto investors and policymakers alike, the message is clear: under the South Korea crypto tax regime, no wallet, hot or cold is beyond reach.
