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South Korea’s National Tax Service (NTS) has intensified its campaign against crypto-related tax evasion, declaring that even digital assets stored in cold wallets may now be subject to seizure if linked to unpaid taxes. The announcement signals a major expansion in the country’s digital asset enforcement measures as Seoul tightens oversight of its growing crypto economy.
According to an official NTS statement, tax authorities are now equipped to track and confiscate cryptocurrencies stored on hardware or offline wallets, ending what had long been considered a safe harbor for delinquent taxpayers. The new measure forms part of a broader push to improve compliance as South Korea prepares for full implementation of its Digital Asset User Protection Act in 2025.
“Taxpayers who believe they can conceal digital assets in cold storage are mistaken,” said Lee Jung-hoon, Director of Digital Tax Administration at NTS. “All taxable holdings, regardless of storage method, are subject to disclosure and enforcement.”
Cold wallets hardware or offline devices that store cryptocurrencies disconnected from the internet have traditionally been viewed as secure from external tracking or seizure. However, the NTS’s latest move leverages expanded cooperation between law enforcement, blockchain analytics firms, and domestic exchanges to map ownership and movement of crypto funds.
Under the revised Tax Collection Framework Act, tax investigators may now trace wallet addresses linked to evading taxpayers using blockchain forensics tools and exchange KYC data. Once confirmed, the NTS can order asset freezes or compel surrender of private keys in cases involving large unpaid tax liabilities.
The government’s approach reflects a shift toward treating digital assets like any other taxable property, said Dr. Kim Eun-seo, a tax policy researcher at the Korea Institute of Public Finance. Cold storage is no longer a loophole ownership on the blockchain leaves a trail.
South Korea’s forthcoming digital asset taxation regime, expected to take effect in January 2025, mandates a 22% tax on capital gains from cryptocurrency transactions exceeding 2.5 million won ($1,800). Under the enforcement roadmap, individuals or entities that conceal assets to avoid these taxes could face seizure orders extending to both hot and cold wallet holdings.
The Ministry of Economy and Finance has emphasized that failure to disclose crypto holdings will be treated as a criminal offense under existing financial reporting laws. Earlier this year, NTS investigators reportedly uncovered more than 5,400 individuals who attempted to evade taxes by moving assets into crypto. Over ₩260 billion ($190 million) worth of digital assets were subsequently seized from domestic exchanges.
Digital currencies are not outside the reach of fiscal authority, said an unnamed Finance Ministry spokesperson. The same standards apply as for fiat non-compliance invites penalties.
South Korea’s approach aligns with a global tightening of crypto-related tax oversight, following similar efforts in Japan, the United States, and the European Union. The country’s model may serve as a blueprint for other jurisdictions confronting the challenges of identifying untaxed digital assets held in self-custody.
International organizations such as the Financial Action Task Force (FATF) and the OECD have repeatedly urged governments to strengthen monitoring of crypto transactions to curb both tax evasion and money laundering.
For South Korean taxpayers, the message from authorities is clear: moving crypto offline will no longer guarantee immunity. As enforcement technology advances, cold wallets may soon become just as transparent to tax collectors as traditional bank accounts.
