South Korea’s National Tax Service ruled that residents must continue reporting qualifying accounts at bankrupt overseas cryptocurrency exchanges even when trading and withdrawals are unavailable. The obligation under Article 53 of Korea’s Act on International Tax Adjustment applies when combined balances in foreign financial accounts exceed 500 million won at any month-end during a year. The Aug. 28 interpretation arose from a creditor’s claim against an overseas exchange that failed in November 2022 and later made partial payouts into a domestic foreign-currency account. Digital assets have been covered by the foreign-account reporting regime since 2023, while self-custody wallets are excluded because they are not accounts with foreign virtual-asset service providers. Korean taxpayers disclosed 10.5 trillion won in overseas digital assets in the 2026 reporting cycle, down 5.4% from a year earlier. The disclosure rules are separate from South Korea’s planned combined 22% tax on annual crypto gains above 2.5 million won from Jan. 1, 2027, though the tax agency has yet to outline treatment of staking, airdrops and acquisition-cost calculations.