What happened?
South Korea’s National Tax Service warned it can search homes and seize cold wallets from crypto holders who don’t pay their taxes. The agency says it can use blockchain tracking tools to trace transactions and, if it suspects coins are hidden offline, confiscate hard drives, PCs, or other storage during searches. The NTS already freezes and transfers assets from domestic exchange accounts and has liquidated crypto from thousands of delinquent taxpayers in recent years.
Who does this affect?
This targets South Korean crypto holders who owe taxes, especially people suspected of keeping coins in self-custody cold wallets. Users who keep funds on domestic exchanges are also at risk because the NTS can suspend wallets and take custody, while traders using overseas exchanges or decentralized platforms may be harder for the agency to reach. Local residents with unpaid bills or fines could face similar seizures as authorities expand enforcement beyond just tax delinquents.
Why does this matter?
Forced seizures and forced liquidations can create extra selling pressure on crypto markets if authorities sell tokens at market prices to recover fiat. The threat of home searches and seizures could push more traders to move assets offshore or into decentralized custody, reducing volume and liquidity on domestic exchanges. With about 78.9 trillion won moved abroad and 146.1 billion won already liquidated by tax authorities, tougher enforcement raises compliance costs, regulatory risk, and could weigh on local crypto valuations and investor confidence.