The South Korean tax authorities are further tightening their approach to crypto tax evasion. Cryptocurrencies that are stored offline in cold wallets can now also be traced and seized. The measure is part of a broader strategy to better control digital assets.
Cold wallets are no longer safe for the tax authorities
According to South Korean newspaper Hankook Ilbo, the National Tax Administration (NTS) has confirmed that it is prepared to conduct searches and seize storage devices such as hard drives and cold wallets. This happens when there are suspicions that taxpayers are hiding their crypto assets offline to avoid taxes.
A cold wallet is a physical storage method for cryptocurrency that is not connected to the internet. This makes them better protected against hackers, but according to the NTS they are also used to hide assets. This makes tax collection more complex and difficult to monitor.
Legal basis and growing control
The NTS operates under South Korea’s Tax Collection Act, which allows it to request account information from crypto exchanges, freeze bank accounts and sell assets to collect outstanding taxes.
The new approach highlights how seriously South Korea is dealing with tax evasion via digital currencies. Since 2021, the NTS has significantly expanded its supervision of crypto transactions and seized hundreds of millions of dollars in crypto assets.
Crypto market is growing explosively
The stricter measures follow enormous growth in the crypto market in South Korea. As of June 2025, the country had almost 11 million crypto investors — an increase of almost 800 percent compared to 2020.
The trade volume also increased sharply: from 1 trillion won (approximately 730 million dollars) in 2020 to 4.7 billion dollars in 2025. Due to this strong growth, the government is forced to further tighten supervision.
More suspicious transactions than ever
The attention to cold wallets comes at a time when more suspicious crypto transactions are being reported than ever before. Data from South Korea’s Financial Intelligence Unit (FIU) shows that virtual asset service providers have filed nearly 37,000 suspicious transaction reports (STRs) through August 2025.
That number is higher than the combined totals of 2023 and 2024. The reports are an important part of the national fight against money laundering and tax evasion involving cryptocurrencies.
South Korea wants to make crypto completely transparent
With the focus on cold wallets and stricter reporting requirements, South Korea is pushing for full transparency within the crypto sector. The government makes it clear that there is no longer a safe haven for those who use digital assets to avoid taxes.
Source: https://newsbit.nl/zuid-korea-kan-nu-ook-cold-wallets-in-beslag-nemen-bij-vermoedens-van-belastingontduiking/
