Korea Digital Asset Custody (KDAC) has been selected by the National Tax Service (NTS) to store seized cryptocurrency, marking the first time a private company will handle government-held digital assets in South Korea.
The move follows a bigger government plan to improve how public institutions manage seized crypto. KDAC said it has signed an official contract for the “seized virtual asset custody and management” project and will begin operations in June.
The tax authority noted that rising volumes of seized crypto assets made it necessary to build a more secure and efficient storage system. The new approach aims to reduce operational risk while improving how digital assets are managed across government agencies.
KDAC, 국세청 압류 가상자산 수탁 맡는다…정부 첫 민간 커스터디 도입 https://t.co/XHk2imA2x0
— 블루밍비트 (@bloomingbit_io) May 29, 2026
Why is South Korea using a private company for crypto custody?
The decision shows growing pressure on public institutions to safely manage increasing amounts of seized digital assets. Instead of building an in-house system, the National Tax Service chose to work with a regulated private custodian.
Officials said the pilot program will help create a standard model for handling seized crypto assets. If successful, it could be extended to other agencies such as the prosecution service, police, and customs authorities. The goal is to create a consistent system that can be used across the public sector.
How will KDAC manage seized crypto assets?
KDAC will be responsible for the secure storage and management of crypto assets seized by the tax authority. This includes safeguarding assets from theft, loss, or unauthorized access while they remain under government control.
The company admitted that it won the contract after receiving the highest technical score among four competing custodians. It added that it will build an operating model that meets government requirements while ensuring strong security standards.
What does this mean for Korea’s crypto system?
The project is seen as a step toward more formal infrastructure for digital assets in South Korea. It shows that government agencies are beginning to rely on regulated private firms for crypto-related operations. Officials expect the pilot to become a reference model for other public institutions managing digital assets.
KDAC said it plans to use the opportunity to strengthen trust in its custody services and support the development of a more structured digital asset management system in the country. Meanwhile, the lawmakers in the country are set to review a proposal to scrap the country’s planned crypto tax after a public petition gathered enough signatures to move forward in the National Assembly.
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