South Korea’s National Tax Service is moving to overhaul how it manages seized digital assets, following a recent security incident that exposed vulnerabilities in its internal custody system.
According to officials and industry sources, the agency is reviewing a plan to appoint private custody providers to hold confiscated cryptocurrency as early as the first half of the year
The move comes after a wallet recovery phrase was inadvertently disclosed in a public press release, leading to unauthorized transfers reportedly worth around $4.8 million.
The incident has prompted the agency to shift away from in-house storage toward a model that relies on professional custodians. Authorities believe outsourcing custody could enhance security and reduce the risk of similar breaches in the future.
Under the proposed framework, the National Tax Service will evaluate potential custody providers based on several criteria, including security standards, company size, and the availability of insurance coverage. These requirements will align with provisions under the Virtual Asset User Protection Act, which governs digital asset operations in the country.
The selection process will be overseen by a dedicated task force established earlier this month to strengthen crypto asset management practices
The group is also working on improving operational procedures for the seizure, storage, and liquidation of digital assets, while coordinating with external experts to assess current systems.
It is worth noting that South Korea has been tightening its regulatory approach to digital assets, particularly as the use of cryptocurrencies in tax enforcement cases grows
The shift toward third-party custodians reflects a broader trend among advanced economies that rely on specialized firms for secure asset management.
In parallel, the agency is preparing to establish a dedicated digital asset management division to centralize oversight
Officials say this will help streamline operations and improve coordination across departments currently handling crypto-related matters.
The move highlights the growing importance of secure infrastructure in government handling of digital assets, as authorities adapt to the challenges posed by an evolving crypto landscape.
Your web3 identity + services + payments in one single link. Get your pay3.so link today.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Galaxy Research Chief: U.S. OFAC Sanctions List Involves 518 Bitcoin Addresses
The U.S. Treasury's OFAC sanctions list includes 518 Bitcoin addresses that have significantly engaged in crypto transactions, currently holding about 9,306 BTC valued at $707 million, highlighting the relationship between cryptocurrency and financial regulation.
GateNews9h ago
SEC Crypto Shift Clarifies Rules Without Blanket Approval
The SEC has adopted a more lenient stance on crypto regulation, allowing some interfaces to operate without broker-dealer registration, but has not given blanket approval for the industry. Recent guidance clarifies how crypto assets are categorized, emphasizing that federal securities laws apply mainly to digital securities. Enforcement activity has decreased as the agency focuses on fraud and market integrity.
CryptoFrontier19h ago
Polish lawmakers want to overturn the president’s veto of the cryptocurrency bill but failed again in their latest attempt to push it through.
Poland’s parliament failed to override the president’s veto of the cryptocurrency regulatory bill, stalling the process of digital-asset legislation and making it one of the few countries in the EU that has not yet implemented the MiCA framework. Differences between the president and the government over the bill’s content led to a political stalemate, affecting market confidence and legal transparency.
ChainNewsAbmedia20h ago
Polish Parliament Fails to Override President's Veto on Crypto Law; PM Alleges Russian Interference
Polish lawmakers failed to override President Nawrocki's veto on a cryptocurrency regulation bill aimed at aligning with EU standards. Tensions rise as accusations emerge of Russian influence in a major crypto exchange amid liquidity issues and lack of regulation.
GateNews22h ago
White House Mediates Clarity Act Stablecoin Dispute, Witt Reveals Legislative Timeline
Patrick Witt announced at the Solana Policy Institute summit that the White House mediated a stablecoin dispute to advance the Clarity Act. The compromise allows banks and crypto firms to together address regulatory concerns, with future focus on crypto taxation and blockchain integration strategies among financial institutions.
GateNews04-18 05:51
Hong Kong SFC Investment Committee Warns Prediction Market Trading May Constitute Illegal Gambling
The Hong Kong SFC warns that prediction markets are speculative and not investment products, lacking regulatory protection. They involve gambling elements, potentially making them illegal. The committee urges the public to differentiate between investment and gambling.
GateNews04-18 03:46
