KDAC Wins First Government Mandate to Custody Seized Crypto for South Korea’s Tax Agency

Korea Digital Asset Custody, or KDAC, has been selected to store virtual assets seized by South Korea’s National Tax Service. The mandate marks the first time a South Korean government agency has entrusted digital assets in its possession to a private specialist custodian.

KDAC said on May 29 that it signed a contract for the National Tax Service’s outsourced custody and management program for seized virtual assets. The company will start the project in June.

The project is a follow-up to the government’s April announcement of measures to improve the holding and management system for virtual assets in the public sector. The National Tax Service said a more stable and efficient management framework was needed as the volume of crypto seized from delinquent taxpayers increased.

The tax agency plans to use the project to pilot a private custody operating system and develop a model for a full-scale program later. It also aims to establish a standard case that could be applied to other public institutions managing virtual assets, including the prosecution service, police and customs agency.

KDAC said it was selected for the project after receiving the highest technical evaluation score among four domestic virtual-asset custodians.

Chief Executive Officer Cho Sung-il said the project represented official recognition by a government agency of the trust and expertise KDAC has built over time. He added that the company would build an operating model that reflects the National Tax Service’s requirements as fully as possible and work to make it a standard for digital-asset management in the public sector.