The National Tax Service (NTS) of South Korea recently faced a significant incident involving the unauthorized disclosure of cryptocurrency information belonging to delinquent taxpayers. Following the leak during a media briefing about the collection performance of tax arrears, the NTS admitted to its mistake and formally apologized for causing public concern. It was revealed that the leak happened when the agency carelessly provided a photo containing sensitive information, specifically a 'mnemonic' that serves as a master key for a cold wallet housing cryptocurrency. This resulted in claims that approximately $4.8 million worth of cryptocurrency had been stolen soon after the information was made public.

In response to the incident, the NTS quickly initiated an internal investigation and sought assistance from the police to trace the route of the stolen cryptocurrency. The police have confirmed that they are investigating a report from an individual who claimed to have stolen the cryptocurrency out of curiosity after seeing the NTS's disclosure online, only to return it the next day. This emerging narrative highlights the vulnerabilities in the agency’s handling of sensitive information, underscoring the potential for further breaches and the need for stronger regulatory measures.

To prevent similar incidents in the future, the NTS has pledged to conduct a comprehensive external audit of its security systems and bolster internal controls to ensure that sensitive information is not mistakenly disclosed during external communications. Additionally, the agency plans to overhaul its manual regarding the seizure, storage, and sale of cryptocurrency, along with enhancing security training for staff. South Korean Deputy Prime Minister and Minister of Economy and Finance, Kyun-cheol Ku, also commented on the issue, indicating that the government does not hold any cryptocurrency apart from those seized during enforcement actions and is working diligently to improve management practices across related departments.