South Korea’s National Tax Service (NTS) is preparing to appoint a private custody provider for seized crypto after a February disclosure of a wallet recovery phrase led to unauthorized transfers of confiscated tokens.
On Feb. 26 the NTS accidentally published an image in an official release showing a Ledger cold wallet alongside an unblurred mnemonic seed phrase. That exposure enabled the theft of crypto worth about $4.8 million, according to reports.
ZDNet Korea, citing informed sources, says the NTS is drafting selection criteria and reviewing plans to outsource custody of confiscated digital assets. The agency reportedly aims to select a provider in the first half of 2026. Candidates will be evaluated on security standards, company size and whether they hold insurance under South Korea’s Virtual Asset User Protection Act.
The move reflects efforts to formalize how authorities store and manage seized crypto after a string of custody failures revealed weaknesses in current procedures.
A newly formed task force will lead the custody-provider selection and push upgrades to digital asset management. The group is working on operational manuals that cover the full lifecycle of seized assets—from seizure through storage and liquidation—along with assessments and personnel training. Officials are also preparing to create a dedicated division to centralize crypto-related responsibilities, which are now split across multiple departments.
The NTS wallet leak, together with a separate incident in which Seoul’s Gangnam police reportedly lost 22 BTC seized in an investigation, prompted an inter-agency review of government handling of digital assets. On March 1 Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol announced a cross-agency probe into seized crypto management.
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