Quick Breakdown
- South Korea launches new crypto tracking systems to combat rising tax evasion.
- Virtual asset investors surge to 10.77 million, daily trades hit ₩6.4 trillion.
- ₩146.1 billion recovered from tax delinquents as crackdown widens to overseas transfers.
As cryptocurrencies cement their place as a major investment class, South Korean tax authorities are intensifying efforts to curb their misuse for tax evasion. The National Tax Service (NTS) is preparing to deploy specialized tracking systems to uncover hidden crypto assets amid a sharp rise in trading activity and investor participation.
Virtual asset adoption soars among South Koreans
Data from the NTS and financial regulators show that the number of virtual asset investors in South Korea has jumped nearly tenfold—from 1.2 million five years ago to 10.77 million as of June 2025. Daily trading volume has also surged sixfold to ₩6.4 trillion, reflecting the deepening integration of digital assets into the nation’s financial landscape.
However, authorities warn that this growth has created new loopholes for tax evasion. Coins, once unregulated and legally ambiguous, became tools for concealing wealth. Following the 2018 Supreme Court ruling recognizing virtual assets’ economic value and the 2020 amendment of the Specific Financial Information Act, regulators began cracking down.
The NTS first seized digital assets in 2021 from 5,741 high-value tax delinquents, recovering ₩71.2 billion. Since then, it has confiscated crypto from 14,140 offenders, collecting a total of ₩146.1 billion over four years.
Crackdown expands to overseas crypto transfers
Tax authorities typically request account data from domestic exchanges under the National Tax Collection Act. If a delinquent’s holdings are confirmed, exchanges freeze and liquidate the assets to settle unpaid taxes. Under the Multilateral Tax Administration Cooperation Agreement, Korea collaborates with 74 countries—excluding the U.S., China, and Russia—to track and recover assets held abroad. In the first half of 2025 alone, crypto worth ₩78.9 trillion was transferred from local exchanges to foreign wallets, signaling growing capital flight risks amid tighter enforcement at home.
Regulators are also witnessing an unprecedented spike in suspicious crypto activity. According to Yonhap News, South Korea’s Financial Intelligence Unit (FIU) and Korea Customs Service (KCS) received 36,684 suspicious transaction reports (STRs) from local virtual asset service providers between January and August 2025.
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