South Korean city seizes crypto from tax evaders

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Key takeaways:

  • Cheongju city authorities aim to confiscate cryptocurrency from individuals owing at least $750 in crypto taxes.
  • This step is prompted by the utilization of cryptocurrency as a method to obscure wealth within the borders of South Korea.

Regulators in Cheongju, South Korea, are taking steps to seize cryptocurrency assets from local individuals who have evaded taxes. A report by Yonhap reveals that authorities have directed seven South Korean crypto exchanges, including Upbit and Bithumb, to scrutinize the holdings of 8,520 users who owe a minimum of 1 million won (approximately $748 USD) in local taxes. 

The Cheongju administration’s initiative, as reported by Yonhap and subsequently by Cointelegraph, involves compelling these platforms to examine the cryptocurrency assets of tax evaders. 

More specifically, the municipal authorities have instructed exchanges like Upbit and Bithumb to delve into the cryptocurrency holdings of these 8,520 users who have fallen short on tax payments of at least 1 million won ($750). 

Subsequent to this inquiry, the Cheongju administration intends to seize cryptocurrencies from these tax offenders, according to the details presented in the report.

Regulators suspect that individuals are utilizing cryptocurrency assets to hide property in South Korea. Consequently, this recent action aims to ensure that citizens who have evaded tax payments are held accountable for their lack of compliance.

The act of confiscating cryptocurrency due to outstanding tax obligations has become a routine procedure in South Korea. In the last two years (specifically in 2021 and 2022), the South Korean government has seized crypto assets valued at over 260 billion Korean won (equivalent to around $180 million USD) as a result of unpaid taxes.

 Regulations permitting the confiscation of digital assets in cases of tax evasion were put into effect in 2021.

Recent events in South Korea underscore the country’s resolute dedication to overseeing the cryptocurrency sector. In a testament to this commitment, the Supreme Prosecutor’s Office (SPO) has established a collaborative team comprising members from various authorities such as the judiciary, finance, tax, and customs. 

This collective effort is aimed at combating offenses connected to cryptocurrencies. In a parallel development, The Bank of Korea (BoK) has secured authorization to enhance its monitoring efforts concerning both cryptocurrency service providers and issuers.

This expansion of monitoring capabilities comes amidst ongoing deliberations surrounding legislation pertaining to virtual assets in South Korea. The BoK has been vested with the authority to conduct investigations into businesses operating within the cryptocurrency sphere. These initiatives collectively underscore South Korea’s proactive approach towards ensuring the responsible management of its cryptocurrency landscape.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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