South Korea Expands Crypto Tax Crackdown to Cold Wallets
South Korea’s National Tax Service (NTS) has expanded its crypto tax crackdown to include cold wallets, deploying advanced blockchain analysis and specialized tracking software to search and seize offline storage devices. Over the past four years, the NTS confiscated and liquidated ₩146.1 billion ($108 million) from 14,140 taxpayers and, since 2021, recovered $50 million from 5,741 high-income debtors. Despite these efforts, an estimated $55 billion moved offshore in the first half of 2025. The number of Korean crypto investors has jumped from 1.2 million to 10.77 million in five years, with daily trading volumes averaging ₩6.4 trillion ($4.5 billion). Under the National Tax Collection Act, exchanges freeze suspicious accounts and transfer seized funds to the NTS, while home searches aim to uncover off-chain holdings. International cooperation spans 74 countries, excluding major markets such as the US, China and Russia. Similar cross-border probes include India’s action against 400 Binance traders. Traders should monitor these regulatory developments as the intensified crypto tax crackdown may tighten liquidity and alter trading patterns.
Bearish
This intensified crypto tax crackdown increases regulatory pressure in South Korea’s market, raising compliance risks and the threat of asset seizures. In the short term, traders may face reduced liquidity and heightened account scrutiny, likely weighing on prices. Over the long term, improved tax compliance could bring greater transparency, but the immediate impact remains bearish for crypto trading activity.