South Korea’s National Tax Service (NTS) is tightening its efforts to curb tax evasion, warning that cryptocurrencies stored in offline “cold wallets” will also face seizure.
According to local outlet, an NTS spokesperson said the agency is ready to carry out home searches and confiscate devices such as hard drives or cold wallets if it suspects taxpayers are hiding crypto assets offline.
The official explained that authorities use blockchain-tracking software to analyze coin transaction records. “If there is suspicion of offline concealment, we will conduct home searches and seizures,” the spokesperson said.
Under South Korea’s National Tax Collection Act, the NTS can request information from domestic exchanges, freeze delinquent accounts, and sell the seized crypto at market value to recover unpaid taxes.
South Korea Sees Surge in Crypto Adoption Amid Tighter Tax Oversight
A cold wallet is a type of crypto storage that stays offline, making it harder for hackers to access funds remotely. While this setup offers stronger protection, the National Tax Service (NTS) noted that it can also be misused to hide assets, complicating tax collection efforts.
The agency’s warning marks a new stage in its crackdown as digital assets continue to grow in popularity across South Korea. According to Hankook Ilbo, the number of local crypto investors reached nearly 11 million by June, an increase of almost 800% from 1.2 million in 2020.
Trading activity has followed a similar trend, rising from 1 trillion won (about $730 million) to 4.7 billion won in the same timeframe. The NTS said the rapid adoption has also fueled more crypto-related tax evasion. Since 2021, authorities have confiscated around $50 million worth of crypto from 5,700 tax offenders.
