South Korea ramps up crypto seizures, will target cold wallets
South Korea’s commitment to combating tax evasion in the cryptocurrency space has reached a new level, as the National Tax Service (NTS) announced plans to target even those crypto assets stored offline in cold wallets. This move underscores the government’s determination to enforce strong compliance measures as crypto adoption becomes increasingly mainstream a hot topic in recent crypto news and sparking discussions across the crypto pur community.
Cold wallets no longer out of reach for authorities
The latest directive from the NTS highlights that cold wallets, which are typically perceived as the most secure way to store digital assets, are under scrutiny. Cold wallets refer to hardware or physical devices and offline solutions designed to keep cryptocurrencies completely disconnected from the internet, making them resistant to hacking. However, South Korea’s tax agency is set to conduct home searches and physically confiscate cold wallets and hard drives from individuals suspected of using these offline tools to evade taxes.
According to the local news outlet Hankook Ilbo, the NTS has made it clear that anyone suspected of hiding cryptocurrencies offline faces the real possibility of home raids. By analyzing coin transaction histories with advanced crypto tracking software, authorities can identify tax evaders who may be stashing assets outside of centralized exchanges.
Aggressive measures: seizures, liquidations, and rising numbers
Under current national laws, the NTS has broad investigative powers. It can request account information from local crypto exchanges, place freezes on accounts belonging to tax delinquents, and liquidate assets at current market value to cover outstanding tax liabilities. These aggressive measures have led to remarkable results in recent years, capturing growing attention within blockchain technology circles.
Since the NTS began targeting crypto for tax enforcement in 2021, enforcement actions have only accelerated. The agency has confiscated and sold off more than $108 million in digital assets from over 14,000 individuals within a four-year span. In its first major operation alone, about $50 million was seized from 5,700 suspects figures demonstrating the scale and determination of Korean regulators.
Driving this crackdown is the explosive rise in crypto adoption: as of June, the number of crypto investors in South Korea ballooned to nearly 11 million, almost an 800% surge from just 1.2 million in 2020. Meanwhile, trading volumes soared from $730 million to $4.7 billion, cementing the country’s position as a major player in the blockchain and digital asset space.
Cold wallets and compliance risks
Although cold wallets strengthen security and protect users against cyber threats, they are now recognized as a tool that can also conceal assets and complicate tax enforcement. The NTS maintains that the National Tax Collection Act provides ample authority to pursue digital assets wherever they are hidden, bridging the so-called compliance gap that once gave cold wallet users a sense of immunity.
Surge in suspicious crypto activity in 2025
This enhanced focus on cold wallets comes amid a dramatic rise in suspicious crypto transactions across South Korea. According to the Financial Intelligence Unit (FIU), local virtual asset service providers (VASPs) reported nearly 37,000 suspicious transaction reports (STRs) by August 2025 exceeding the totals for both 2023 and 2024 combined and setting a new national record. STRs remain a critical component of the nation’s Anti-Money Laundering (AML) framework and ensure that questionable activities across both centralized exchanges and cold storage solutions are investigated thoroughly.
Blockchain technology in regulatory enforcement
These developments position South Korea as one of the most proactive countries in regulating digital assets and taxing crypto gains. By harnessing the power of blockchain technology for investigation and compliance, regulators can trace, seize, and liquidate assets more efficiently than ever a trend closely followed in global crypto news.
For the crypto pur community and blockchain industry at large, South Korea’s strategy signals a new era of regulatory rigor, where technological innovation is not just for investors, but a powerful tool for government oversight as well. As crypto adoption continues to skyrocket, remaining up-to-date on these regulatory shifts is essential for anyone involved in the evolving digital asset ecosystem.