Key Highlights
- NTS will hand seized crypto to private custody firms to prevent a repeat of a 6 billion KRW theft caused by leaked mnemonic phrases.
- A dedicated Task Force aims to centralize crypto management and set strict rules for custody provider selection.
- As the NTS builds a new tracking system for 2027, the opposition People Power Party has submitted a bill to abolish the crypto tax entirely for tax fairness.
South Korea’s National Tax Service (NTS) is taking steps to protect seized cryptocurrencies. The agency plans to hand over these assets to private custody companies in the first half of this year.
The decision follows a series of lapses, including an incident where nearly 6 billion won (~$4.05 million) was stolen because security codes were accidentally leaked in a press release. By moving away from storing assets in-house, NTS hopes professional custody services can provide stronger security and prevent similar incidents in the future.
As per a local report, the NTS is working on clear rules to pick the right companies to hold seized crypto. Officials will check each provider’s security, size, and insurance, following the Virtual Asset User Protection Act. A crypto industry expert warned, “Just because a provider is a custody service provider does not mean you can entrust your assets to them.”
They added, “I understand that the National Tax Service is currently collecting information on factors to consider when entrusting assets, such as security levels.” Once the NTS finalizes the rules, it plans to start selecting providers without delay.
Task force leads crypto security reform
The new Task Force for Advanced Virtual Asset Management is leading the effort. Set up on March 11, the team manages the seizure, storage, and sale of digital assets. Ko Young-il, Head of the Task Force, said, “This is a method mainly used in developed countries. We plan to implement it in the first half of the year as soon as a decision is made after gathering expert opinions.”
The task force also plans to create a dedicated Digital Asset Management Division to bring all crypto operations under one roof, instead of having them spread across different departments.
Market context and policy updates
At the same time, South Korea’s opposition, the People Power Party, recently proposed a bill to eliminate crypto taxes by 2027. Party floor leader Song Eon-seok said taxing digital assets could lead to double taxation and create extra hurdles for foreign investors. He added, “Given that the financial investment income tax has been abolished… imposing a separate income tax on digital assets raises issues regarding equity and consistency in the tax system.”
Meanwhile, South Korea’s crypto market keeps growing, reaching 95.1 trillion won, or about $63.4 billion, as of June 20, 2025. With the NTS now turning to professional custody services and stricter oversight, the government hopes to secure seized assets and strengthen investor confidence.
Also Read: FBI Issues Urgent Warning Over Fake “FBI Token” on Tron Blockchain
