South Korean city Cheongju plans to seize crypto assets from 8,520 tax delinquents using exchanges, reinforcing the country’s crackdown on crypto tax evasion.
Key Points
- Cheongju, South Korea targets cryptocurrency tax evaders through exchanges like Upbit and Bithumb.
- Investigations reveal 8,520 users owe at least $750 in local taxes, prompting plans to seize their crypto assets.
- South Korean tax authorities have been clamping down on crypto tax evasion, seizing $180 million worth of assets in 2022.
- South Korea’s commitment to crypto regulation is exemplified by its new digital asset bill and proactive approach to taxation in the digital asset space.
City authorities in Cheongju, South Korea are taking decisive action against local tax evaders involved in the cryptocurrency space.
The move comes amid concerns of accountability among residents who have avoided paying taxes through the use of cryptocurrencies.
The administration has reached out to seven prominent South Korean crypto exchanges, including Upbit and Bithumb, to investigate the crypto assets of tax delinquents.
It has been revealed that 8,520 users on these platforms owe a minimum of 1 million won ($750) in local taxes.
JUST IN:🇰🇷South Korea to seize #crypto from tax evaders owing the government more than $750 in taxes. #bitcoin pic.twitter.com/fHVBjNHC8K
— Crypto Macro (@cryptomacro14) August 22, 2023
Seizure of crypto assets
To address the growing issue of wealth being concealed through cryptocurrencies in the country, Cheongju’s regulators are taking proactive steps.
Once the investigations are complete, the city authorities plan to seize the crypto assets from tax delinquents. This approach is part of a broader effort to establish fair taxation practices in the digital asset realm.
South Korean tax authorities have been cracking down on tax evasion in the crypto space since September 2020.
Last year alone, they seized 260 billion won ($180 million) worth of crypto assets due to tax evasion. Out of this amount, 176.3 billion won was seized for national tax arrears and 83.49 billion won for local tax arrears.
The collected arrears from these seizures reached 84.1 billion won. Notably, virtual assets seized in the metropolitan area, including Seoul, Incheon, and Gyeonggi, constituted around 30% of the total.
The National Tax Service (NTS) has been at the forefront of this crackdown, empowered by revisions to tax laws that give them legal authority to demand the transfer of virtual currency from tax evaders and exchanges.
The NTS’s approach includes “compulsory collection,” which leads to tax payment settlements and, in some cases, the liquidation of seized coins.
Concluding Thoughts
South Korea has demonstrated its commitment to regulating the crypto sector by passing its first independent digital-asset bill a few months ago.
The bill, known as the Virtual Asset User Protection legislation, aims to safeguard investors after the collapse of tokens associated with Do Kwon.
It defines digital assets, penalizes violations like market manipulation, and grants regulatory oversight to the Financial Services Commission.
With the efforts of Cheongju authorities in targeting tax evaders in the crypto space, South Korea is positioning itself as a country that is actively addressing tax evasion and working towards establishing fair taxation practices in the digital asset realm.
This crackdown serves as a warning to those attempting to avoid their tax responsibilities through the use of cryptocurrencies.
