The government of the city of Cheongju, located in central South Korea, intends to confiscate virtual assets, such as Bitcoin, from tax evaders.
According to a local media report on Aug. 22, city officials sought the cooperation of seven cryptocurrency exchanges, including Upbit and Bithumb, to punish these violators.
These exchanges were required to report the cryptocurrency holdings of 8,250 people, each of whom owed more than 1 million South Korean won ($747) in local taxes.
Upon completion of this task, the Cheongju City authorities will review the acquired data before seizing and liquidating these assets to obtain the outstanding taxes.
Crypto assets as a tool for tax evasion in South Korea
Due to the anonymity that comes with cryptocurrency, these assets are often labeled as a weapon for tax evasion.
Once again, this notion was highlighted by the Cheongju city government, which claimed that cryptocurrencies are commonly used to hide income in South Korea, hence the reason for this asset forfeiture initiative.
Interestingly, this would not be the first time that such an event has taken place in a South Korean city. In 2022, the Cheongju authorities requested a report on the cryptocurrency holdings of 16,000 people before proceeding to seize 68 million won ($51,000) from 17 investors.
In South Korea, seizing crypto assets to evade taxes is a common practice, as the country’s Supreme Court considers these assets to represent legitimate property interests and therefore subject to confiscation by national authorities.
According to a report on the “State of Seizure of Virtual Assets” submitted to the South Korean National Assembly in September 2022, the Asian country’s tax regulators seized 259.79 billion won ($194.15 million) in back taxes. between 2021 and 2022.
Of these values, the amount of assets seized in Gyeonggi-do province accounted for the highest value, with 53.04 billion won ($39.65 million), followed by the country’s capital, Seoul, with 17.84 million won. won ($23.24 million). .
Crypto regulations continue to rise in South Korea
In other news, the South Korean government continues to introduce more regulations to rid its crypto market of all illegal activities that are supposedly trying to protect the interests of users.
South Korea is considered one of the most formidable cryptocurrency hubs in the world, and data from Coinhills shows that the Korean won is the second most traded national currency for Bitcoin, after the US dollar.
In July, the country’s government established a joint crypto-crime task force made up of 30 people from various agencies, including the National Tax Service, Financial Supervisory Service, etc.
In addition, to improve transparency in the crypto space, the country’s Financial Services Commission recently announced that companies trading cryptocurrencies will be required to disclose their holdings in their financial statements from 2024 onwards.