South Korea Launches Crypto Wallet Tracking System: What Will Change
South Korean tax authorities have decided to take cryptocurrencies seriously. The National Tax Service (NTS) has announced a tender for the development of software that will track transactions in real time — including those passing through non-custodial wallets (i.e., wallets where the user holds the keys, not the exchange). The system is planned to launch as early as summer 2026.
Why This Matters
Until now, non-custodial wallets have remained a "gray area" for regulators. Unlike exchange accounts, where the exchange knows its customer, such wallets are not tied to an individual — the owner is solely responsible for their keys. This makes them a popular tool for tax evasion and fund withdrawal.
The new NTS system aims to close this loophole. Here’s what it will be able to do:
- Analyze transaction chains across different blockchains.
- Match transfers with the taxpayer database.
- Identify undeclared assets and hidden income.
- Track the movement of funds between cold wallets (offline storage) and regulated exchanges.
Scale of the Problem
According to the Financial Services Commission (FSC), in the second half of 2025 alone, 90 trillion won — about $60 billion — flowed from South Korean exchanges to foreign platforms and private wallets. A significant portion of these funds was likely undeclared.
What This Means for Ordinary People
For conscientious taxpayers, the system is a step toward fairness: evading taxes will become harder. But for those using cryptocurrencies anonymously, the rules of the game are changing. South Korea is consistently tightening control: mandatory KYC (identity verification) on exchanges was previously introduced, and now non-custodial wallets are in the crosshairs.
Key Points
- The NTS is developing software to monitor all crypto transactions, including non-custodial wallets.
- The system will analyze transfer chains and match them with taxpayers.
- In six months, $60 billion in crypto was moved out of the country — a potential target for audits.
- Launch is scheduled for summer 2026.
- South Korea is one of the largest crypto markets, so its actions influence global regulatory trends.
— Editorial Team
