South Korea’s tax office looks at personal protection after crypto losses are caught
South Korea's National Tax Service (NTS) is moving to select a private custody service provider for seized crypto assets after a February press release revealed a wallet acquisition phrase that led to unauthorized transfers of stolen tokens.
In the year On February 26, NTS accidentally exposed the seed phrase of a crypto wallet in a public press release, resulting in an unauthorized transfer of crypto tokens estimated at $4.8 million. The release includes an image of a Ledger wallet and a sheet of paper that blurs out the phrase.
Citing people familiar with the matter, Znet Korea reported that the agency is reviewing plans to crack down on seized crypto and developing selection criteria for providers. NTS reportedly aims to select a supplier in the first half of 2026.
The agency plans to evaluate candidates based on various factors, including security requirements, company size and whether or not the company has insurance under South Korea's Virtual Property User Protection Act, ZNet Korea reported.
The move shows that South Korean authorities are trying to wrest control from a series of seized cryptocurrencies by exposing weaknesses in how they store and manage seized digital assets.
A new task force to oversee the security provider selection process
The conservatorship will reportedly be led by a newly formed task force focused on improving digital asset management systems.
The task force is said to be working on a number of initiatives to improve operational manuals covering the entire life cycle of seized assets, from capture to storage and disposal. It also conducts evaluation and staff training.
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The group is preparing to set up a dedicated unit to handle crypto-related work.
Since NTS Authority Crypto is relatively new, responsibilities are divided among departments. However, preparations are being made to create a centralized unit, Znet Korea reported.
The leak of NTS wallet seed requires inter-agency verification
The leak of the NTS wallet and separate custody failure led Seoul's Gangnam police to seize 22 BTC, prompting authorities to conduct a review of inter-agency crypto assets.
On March 1, South Korea's Vice Prime Minister and Minister of Economy and Finance Ko Yoon-cheol announced an agency-crossing investigation into how the government handles seized digital assets.
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