Photo = National Tax Service

 

 

[Alpha Biz= Paul Lee] South Korea’s National Tax Service (NTS) is considering entrusting cold wallets containing seized cryptocurrency to external custody institutions following a recent security breach involving confiscated digital assets, the Herald Business reported exclusively.

According to documents submitted to the National Assembly and obtained by The Herald Business, the NTS said it is reviewing a plan to have external custody firms manage cold wallets seized from delinquent taxpayers and will also establish dedicated personnel to oversee digital assets.

The move follows a recent incident in which the NTS accidentally exposed a mnemonic code—a key used to restore a crypto wallet—while promoting its seizure of cryptocurrency from a high-value tax delinquent. The exposure led to the theft of cryptocurrency worth about 6 billion won ($4.5 million).

In the case, a man initially returned the stolen coins and reported himself to the police, but another hacker later stole the assets again, resulting in two separate theft incidents.

A cold wallet is an offline electronic wallet used to store digital assets. Because the mnemonic code acts as a master key that allows the wallet to be restored anywhere, weak management of the code can lead directly to asset theft. Institutional investors and companies typically store such wallets with professional custody providers to maintain stronger security.

The issue is expected to be discussed at a National Assembly Strategy and Finance Committee meeting on March 11, where lawmakers will review follow-up measures related to the breach.

 

 

 

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