Key Points
- •South Korea's NTS extends crypto tax enforcement to cold wallets.
- •Move to increase compliance in growing crypto sector.
- •Potential impact on cryptocurrency storage practices.
South Korea’s National Tax Service has expanded crypto tax enforcement to include cold wallets, stating assets in these offline devices are now subject to home searches and seizure if suspected of asset concealment.
This development underscores increased scrutiny in response to growing crypto adoption and tax evasion, potentially impacting crypto market flows and compliance behaviors in South Korea.
South Korea's National Tax Service (NTS) has formally extended its crypto tax enforcement to include cold wallets. This signifies an increased effort to combat tax evasion amid growing virtual asset adoption in the country. Current practices previously targeted exchange-held assets exclusively.
The NTS has broadened its approach by incorporating home searches and seizures for cold wallets suspected of hiding assets. Conducted under the National Tax Collection Act, this move applies to Bitcoin, Ethereum, and all digital assets potentially used for tax avoidance.
“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 Official, National Tax Service of South Korea
The enforcement has led to South Korea seizing over $108 million from over 14,000 individuals since 2021. Users may return to exchanges to validate holdings, anticipating regulatory actions or market sales. This signifies market shifts and regulatory alerts.
With trading volumes increasing from $730 million in 2020 to $4.7 billion in 2025, this approach highlights the government's drive to keep pace with local crypto expansion. Approximately 11 million investors now engage in cryptocurrency markets, up from 1.2 million in 2020.
The South Korean adjustment stands out as few global regulators seize cold wallets, typically seeking exchange cooperation. This development could initiate similar measures elsewhere, affecting cryptocurrency legitimacy, compliance, and operational norms.
Historical trends suggest increased crypto storage and transaction scrutiny could arise following regulatory interventions. Trading volumes in Korea saw a dramatic rise, showcasing growing interest while reflecting enforcement’s effectiveness in reclaiming compliance for virtual asset activities.