South Korea spends $2.2 million to build an AI tax-enforcement system, developing smart contract verification tools

According to Cryptopolitan, on May 8, the Korea National Tax Service (NTS) officially launched a project to build an AI tax-tracking system in the Seoul Regional Tax Office, with an estimated budget of about $2.2 million, and is expected to be completed by the end of 2026. According to Korean outlet Edaily, the Financial Security Institute (FSI) announced the development of a security verification tool dedicated to smart contracts and is pushing three major projects, including building a verification framework and cultivating digital-asset talent.

Korea NTS AI crypto tax-tracking system

According to Cryptopolitan, the NTS AI system will extract crypto-transaction records from exchange filing documents and blockchain data, and flag suspicious transactions such as money laundering, undeclared gifts, and offshore tax evasion. The tracking scope also covers non-custodial wallet transactions—such tracking is difficult to achieve with exchange reports alone. According to ETNews, the system will draw transaction flow maps of crypto funds between wallets and use AI models to detect and identify suspicious fund flows.

The NTS is coordinating implementation details with five major exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax. Moon Kyung-ho, head of the National Tax Service’s Income Tax division at the Ministry of Economy and Finance, said that the NTS’s final tax guidelines are expected to be completed by the end of 2026.

Korea confirms a 22% crypto tax regime in 2027

According to Cryptopolitan, on May 7, 2026, Moon Kyung-ho, head of the Income Tax division at Korea’s Ministry of Economy and Finance, confirmed that starting January 1, 2027, Korea will impose a 22% tax on crypto-asset gains with annual收益 exceeding 2.5 million won (about $1,800). The tax includes 20% national income tax and 2% local tax. Moon said: “We will begin implementing taxation on virtual assets starting next January according to the plan.” This tax category had previously been postponed twice from the original 2025 schedule due to political factors and industry resistance.

According to an investigation by the Financial Services Commission (FSC), Korea currently has more than 11 million verified crypto investors, and the growth rate of trading accounts has fallen from 25% in the first half of 2024 to 3% in the second half.

Financial Security Institute smart-contract verification tool: three major projects

According to Edaily, FSI President Park Sang-won announced that in line with推进 the institutionalization of the security token offering (STO) regime and the second phase of the virtual asset law, it will drive the following three core actions:

Verification tool development: Develop specialized tools to automatically detect key vulnerabilities in smart contracts within digitized-asset services such as tokenized securities and stablecoins. Focus areas include high-frequency financial-service vulnerabilities such as reentrancy attacks, access-permission errors, and missing collateral verification, and combine with the domestic financial regulatory environment to continuously update customized detection standards

Verification framework buildout: Establish verification procedures and standards covering the entire process from smart-contract development, deployment, and operations, and publish the “Smart Contract Security Guide” to member companies

Talent cultivation: Share smart-contract security expertise with digital-asset and security management personnel at financial institutions through seminars and consultation mechanisms

FSI President Park Sang-won said: “To ensure the reliability of the digital-asset market, it is necessary to protect the security of the smart contracts that serve as its foundation.”

Frequently asked questions

What are the budget and expected completion time for Korea NTS’s AI crypto tax-tracking system?

According to Cryptopolitan’s May 11, 2026 report, the budget for NTS’s AI tracking system is about $2.2 million. It was officially launched on May 8, 2026 at the Seoul Regional Tax Office, is expected to be completed by the end of 2026, and will coordinate with five major exchanges including Upbit and Bithumb to implement details.

What is the tax rate and the tax start date for Korea’s crypto capital gains tax?

According to Cryptopolitan, the Ministry of Economy and Finance confirmed that starting January 1, 2027, Korea will impose a 22% tax on crypto-asset gains with annual收益 exceeding 2.5 million won (about $1,800), composed of 20% national income tax and 2% local tax. This had previously been postponed twice from the originally scheduled 2025 dates.

What types of vulnerabilities will Korea’s Financial Security Institute smart-contract verification tool focus on detecting?

According to Edaily, the verification tool planned for development by the Financial Security Institute will focus on detecting high-frequency financial-service vulnerability types such as reentrancy attacks, access-permission errors, and missing collateral verification, and will continuously update customized detection standards in coordination with the domestic financial regulatory environment.