South Korea’s National Tax Service (NTS) will overhaul its system for seizing, storing and selling virtual assets, Field News reported.

The reform follows a crypto leakage incident in February, when a mnemonic code was exposed in materials explaining the seizure of a delinquent taxpayer’s virtual assets, leading to an actual outflow of crypto. The NTS later recovered the leaked coins with help from relevant agencies and returned the seized assets.

Under the new framework, the NTS plans to build computerized links with South Korea’s five major crypto exchanges, replacing the current manual process based on official document requests. The system is expected to enable near real-time checks and seizure of delinquent taxpayers’ virtual asset holdings.

For assets seized from personal wallets, the NTS will also shift custody from its own electronic wallets and physical safes to private professional custody providers selected through open competitive bidding. The agency said this will improve real-time monitoring of asset transfers and storage while strengthening protection of taxpayers’ property rights.

The NTS is also developing a Digital Asset Seizure Tool, known as DAST, in cooperation with the National Security Research Institute. The tool will help detect wallet and exchange access records, identify and restore mnemonic codes, and support asset transfers to reduce operational errors and security risks.

In addition, the NTS will tighten its internal security procedures. Press releases related to virtual assets will be treated as security-sensitive materials and undergo a three-stage review involving the responsible department, spokesperson’s office and information security division. Prior approval from the chief information security officer will also become mandatory.