October 12, 2025 — South Korea’s National Tax Service (NTS) is escalating its campaign against crypto tax evasion, and this time, cold wallets are no longer safe. The agency has publicly announced that it will now seek to seize crypto assets stored in offline wallets and conduct home searches of suspected tax delinquents.
What’s Changing in Korea?
For years, tax authorities focused primarily on crypto held in exchange accounts, which are easier to trace and freeze under existing legal mechanisms. But NTS now considers offline storage, such as hardware wallets, hard drives, or other “cold wallet” devices, as potential hiding spots for undeclared assets.
According to reports, the NTS is ready to obtain warrants to search homes and confiscate hardware wallets when there is suspicion that an individual is concealing crypto holdings to evade taxes.
Korea’s Enforcement & Historical Track Record
South Korea has already taken aggressive steps in recent years:
- Since 2021, NTS has seized and liquidated over USD $108 million worth of crypto across more than 14,000 individuals deemed delinquent.
- In earlier operations, approximately 5,700 suspected tax evaders had their assets confiscated, totaling around 50 million USD.
- The number of crypto investors in South Korea has surged to nearly 11 million as of mid-2025,up nearly 800% compared to 2020.
- Trading volumes have similarly ballooned, making the scale of potential tax evasion far greater.
These figures reflect not only a booming crypto market but also a steeper challenge for regulators in curbing undeclared holdings, including those stored offline.
Legal Basis & Mechanisms
Under South Korea’s National Tax Collection Act (NTCA), the NTS already has authority to:
- Request account data from local crypto exchanges,
- Freeze accounts of tax delinquents,
- Liquidate assets at market value to satisfy outstanding tax obligations.
The new expansion into cold wallets represents a strategic shift, using search warrants and physical asset seizure to plug gaps where digital trails are harder to trace. However, the move raises significant legal and technical questions, especially around proving device ownership, accessing private keys, and balancing due process and privacy.
Implications for Crypto Users & Platforms
For Individual Users:
- Holding large balances in cold wallets is no longer a guaranteed safeguard against tax scrutiny.
- Users must be prepared for regulatory pressure and possibly losing access or control if devices are seized.
- Transparency and compliance are becoming increasingly critical.
For Exchanges & Crypto Businesses:
- Exchanges may face higher obligations to share account data, respond to warrants, and cooperate with investigations.
- Platforms with strong compliance, audit trails, and KYC/AML procedures may have better resilience in this regulatory climate.
- Projects and businesses must anticipate increased regulatory overhead and risk mitigation strategies in South Korea.
Hotcoin remains committed to transparency, compliance, and user protection. We will keep monitoring developments in South Korea and globally, keeping you informed and prepared.
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