Cold Wallets No Longer Safe as South Korea Escalates Crypto Tax Seizures
South Korea’s National Tax Service (NTS) is tightening its grip on cryptocurrency tax evasion by extending enforcement measures to include the seizure of cold wallets—offline storage devices used for self-custody of digital assets.
According to the , the tax agency has begun coordinating with local authorities to trace and confiscate digital assets belonging to individuals with unpaid tax liabilities. Officials confirmed that when evidence suggests crypto holdings are hidden offline, investigators may obtain warrants to search residences and seize hardware wallets or other physical storage devices.
The crackdown marks a major escalation in South Korea’s efforts to recover unpaid taxes tied to cryptocurrency investments. Since 2021, the NTS has seized more than 146 billion won (about $103 million) worth of crypto assets from over 14,000 tax-delinquent individuals. The new directive signals the government’s intent to close remaining loopholes that have allowed wealthy evaders to shelter assets outside centralized platforms.
Authorities have traditionally relied on domestic platforms to enforce tax collections, freezing assets linked to known delinquents. However, as more users move funds into cold or non-custodial wallets—devices disconnected from the internet and beyond direct platform oversight—the NTS is now turning to physical seizure as a last resort.
“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,” an NTS official said.
Still, the move raises significant questions about due process, privacy, and enforcement feasibility. Legal experts note that verifying ownership of cold wallets or accessing Secret keys without cooperation could prove hard. The initiative also risks clashing with existing exemptions that exclude non-custodial wallets from certain overseas financial reporting requirements.
Meanwhile, the agency continues to struggle with crypto assets held on foreign platforms. Data from the first half of 2025 shows that South Koreans transferred more than 78.9 trillion won ($55.6 billion) worth of crypto to overseas platforms, complicating enforcement efforts.
Restriction And Market Order
suspended for four years, for embezzling more than 4.2 billion won ($3 million) from her management agency to finance cryptocurrency investments. The Jeju District Court found that Hwang, who owns the agency, transferred the funds 13 times under false “advance payment” claims between January and April 2022.
Her conviction comes as South Korea heightens its oversight of digital assets. crypto transactions this year, highlighting growing concerns over illicit flows.
At the identical time, Busan Digital Asset Custody Services, in partnership with Woori Bank, launched KRW1, , reflecting Seoul’s dual approach of stricter regulation and the formal integration of blockchain finance into its financial system.
