South Korea’s taxman is coming for your cold wallet (yes, really!)
If you’re holding crypto in South Korea and you’ve been a bit, shall we say, creative with your tax declarations, you might want to pay close attention. The National Tax Service (NTS) in South Korea is significantly stepping up its game against tax evasion, and they’ve just issued a stern warning: even those offline, “cold” crypto wallets aren’t out of their reach anymore.
According to a local news report, an NTS official basically said they’re ready to get their hands dirty. If they suspect a tax delinquent is hiding crypto offline, they’re prepared to conduct home searches and seize things like hard drives and even the physical cold wallet devices themselves. “We use crypto-tracking programs to analyze a delinquent’s transaction history,” an NTS spokesperson reportedly stated, “and if there’s a suspicion of offline concealment, we will conduct home searches and seizures.”
Now, for those who don’t know, a cold wallet is essentially a way to store your cryptocurrency completely disconnected from the internet. This is generally considered the safest way to keep your digital assets, making it much harder for hackers to get to them. But for the NTS, this very security feature is a problem – it means people can use them to hide assets from the tax authorities, making their job a lot tougher.
Under South Korea’s National Tax Collection Act, the NTS already has quite a bit of power. They can ask local crypto exchanges for account information, freeze the accounts of people who owe taxes, and then sell off those assets at market value to cover the unpaid bills.
A history of high-stakes seizures
This isn’t new territory for the NTS. They’ve been cracking down on crypto tax evaders since 2021. Back then, they managed to seize around $50 million from about 5,700 suspects. But they’ve really ramped things up since. Over the past four years, the NTS has reportedly seized and liquidated a staggering $108 million in cryptocurrency from over 14,000 individuals. That’s a serious chunk of change!
Why the sudden intensification?
The reason for this intensified crackdown is pretty clear: crypto has absolutely exploded in popularity in South Korea. According to reports, the number of crypto investors in the country shot up to nearly 11 million by June of this year – that’s a massive 800% increase from just 1.2 million in 2020. And with more people trading, the volumes have skyrocketed too, from about $730 million to an incredible $4.7 billion in the same period.
Naturally, with more people getting into crypto, there’s also been an increase in people trying to avoid paying taxes on their gains.
This intensified focus on cold wallets by the NTS also comes at a time when “suspicious” crypto transactions are surging. Just by August 2025, data from South Korea’s Financial Intelligence Unit (FIU) showed that virtual asset service providers (VASPs) had filed nearly 37,000 Suspicious Transaction Reports (STRs). These reports are a crucial tool for fighting money laundering, and the number filed this year has already blown past the combined totals of 2023 and 2024, setting new records.
So, the message from South Korea is loud and clear: if you have crypto, and especially if you’re trying to keep it off the grid to avoid taxes, the NTS is watching – and they’re willing to come knocking.
