South Korea has started laying the groundwork for a new tracking system designed to impose taxes on profits from cryptocurrency investments.
An AI Crypto Tracking System
According to The Korea Times, the National Tax Service (NTS) announced this Thursday that they are moving ahead with an AI-driven system to track crypto investment gains as they prepare to start taxing virtual asset profits from January 2027. The NTS said that the system “is expected to serve our goal of collecting individuals’ virtual asset transaction data starting in 2027”.
A $2 Million Project
In order to achieve this, the NTS issued a tender for what they call a “Comprehensive System for Virtual Asset Transaction Analysis”. There, they detailed that the project has a budget of around ₩3 billion ($2 million) and that the designing of the system will start in April. A pilot operation for the system should be ready to begin in November, after passing multiple tests runs, and be ready to fully launch between November and December.
The notice was uploaded to an online bidding system run by the Public Procurement Service, the agency in charge of sourcing goods and services for the government and affiliated bodies. A winning contractor is expected to be chosen and signed within this month.
A New Era Of Crypto Surveillance
With this new system, the NTS plans to aggregate data from domestic exchanges, blockchain analytics and existing tax databases, leveraging AI and machine learning to detect unusual patterns and potential tax evasion.
This recent update follows past January NTS’s unveiling of a new “control tower” unit created under the 2026 National Tax Administration Operation Plan to coordinate all virtual‐asset tax enforcement and monitoring of offshore flows.
According to Korean tax briefs, retail investors will face taxation on annual crypto gains above a set threshold (e.g., ₩2.5 million), while institutions are being given clearer but stricter rules on holding major coins, excluding stablecoins.
Korea’s Under Scrutiny Over Crypto
Even though the Korean government has repeatedly delayed full crypto‐gains taxation, it is now building one of the world’s more sophisticated virtual‐asset tax architectures, including real‐time monitoring and cross‐border cooperation.
The Korean government has recently been under fire because of embarrassing crypto scandals, like the loss of custody crypto assets and the accidental leak of wallet data by the NTS itself. It seems that the recurrence of these security breaches and mismanagement incidents have intensified political pressure to modernize systems, tighten oversight and demonstrate that crypto profits can be taxed as reliably as traditional assets.
What Traders Should Brace For
Once the system is live, Korean traders should assume high‐value transactions are traceable across exchanges and borders, making aggressive tax‐avoidance strategies, especially offshore routing, far riskier.
It is safe to assume that South Korea’s model could become a template for other high‐tax, high‐adoption jurisdictions, making it harder to treat crypto as an off‐grid asset class.
BTC’s price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Cover image from Perplexity, BTCUSD chart from Tradingview
