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8 Apr, 2024 10:21

South Korea seizes crypto from tax ‘delinquents’ – media

Local authorities have reportedly lowered the debt threshold and employed mobile phone tracking to find the digital assets of evaders
South Korea seizes crypto from tax ‘delinquents’ – media

A city government in South Korea plans to confiscate crypto assets from citizens who owe the equivalent of several hundred dollars or more in taxes, Korean media have reported. This comes as part of a wider crackdown on evaders. 

The authorities of the city of Pohang, a large municipal center in the country’s east, will seize and freeze the digital assets of those who owe 500,000 won (about $368.76) or more to the local tax office, according to the daily newspaper Kyongbuk Maeil Shinmun.

The value of virtual assets owned by local tax ‘delinquents’ has soared recently, with over $12 million being owed in overdue arrears to the city, the publication writes. Local authorities are investigating whether over 5,200 tax evaders have digital assets on exchanges such as Bithumb, Upbit, Korbit and Coinone, it adds.

If confirmed, the crypto account of a person with tax arrears will be immediately seized and transaction activities such as sales or withdrawals will be stopped, the report goes on to explain. If the arrears are not voluntarily paid after seizure, the virtual assets will be sold on the exchange market to cover the delinquent taxes, the publication states.

“We will do our best to raise awareness about chronic delinquent taxpayers by not only seizing and selling virtual assets but also introducing various customized collection techniques suitable for the digital age,” the newspaper quoted the head of the local tax office, Won Ki-ho, as saying.

Pohang city is the latest South Korean municipality to employ tax-related cryptocurrency confiscations. Last year, authorities in the city of Cheongju said it intended to target those who owed roughly $750 in local taxes.

Also in 2023, Gyeonggi Province, the most populous in South Korea, collected $4.6 million from tax evaders by tracking their crypto assets on several centralized exchanges, according to Yonhap News Agency. 

The authorities in Gyeonggi used a new digital system that includes tracking mobile numbers to identify users’ accounts on cryptocurrency exchanges. The technique has helped reduce the time it takes to investigate whether a tax evader owns digital assets from six months to around two weeks, Yonhap wrote.

According to the crypto currency news outlet Cointelegraph, in 2022 and 2021 combined, the South Korean government confiscated as much as $180 million worth of digital assets from tax evaders. Similar practices have been employed in Hungary and the UK.

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