South Korea tax agency seeks private crypto custodian after security lapses

South Korea’s tax agency is seeking a private custodian for seized crypto after a wallet seed phrase leak exposed government-held assets.

South Korea’s National Tax Service (NTS) is moving to select a private custody provider for seized crypto assets after a February press release exposed a wallet recovery phrase and triggered the unauthorized transfer of confiscated tokens.

On Feb. 26, the NTS accidentally exposed a crypto wallet seed phrase in an official press release, resulting in the unauthorized transfer of crypto tokens valued at about $4.8 million. The release included an image of a Ledger cold wallet and a sheet of paper showing the mnemonic phrase without being blurred. 

Citing people familiar with the matter, ZDNet Korea reported that the agency is reviewing a plan to outsource custody of confiscated crypto and is drafting selection criteria for providers. The NTS is reportedly aiming to select a provider within the first half of 2026. 

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