According to Cointelegraph, South Korea’s National Tax Service (NTS) is seeking private custodial service providers to manage seized crypto assets, following a security incident in February in which an official press release inadvertently leaked a wallet’s mnemonic phrase, resulting in the unauthorized transfer of assets. On February 26, the NTS accidentally published an unobscured image of a Ledger cold wallet and its corresponding mnemonic phrase in an official press release, leading to the unauthorized movement of approximately $4.8 million in seized crypto assets. According to ZDNet Korea, the NTS is developing selection criteria for custodial service providers and plans to complete the selection process by the first half of 2026. Evaluation criteria will include security requirements, institutional size, and whether candidates hold insurance qualifications under South Korea’s Virtual Asset User Protection Act.
South Korea’s NTS Seeks Private Custodians Following Mnemonic Phrase Leak Incident
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Summary
South Korea’s NTS seeks private custodians following a security breach in February 2026, when a mnemonic phrase was inadvertently disclosed in an official press release, resulting in the theft of $4.8 million in crypto assets. The NTS is now establishing selection criteria for custodians, including security and insurance compliance under local regulations. The development underscores the growing need for secure custody solutions in public institutions. The selection process is expected to be completed by mid-2026.
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