South Korean city targets crypto held by tax evaders

Authorities in the South Korean city of Cheongju are looking to seize crypto from tax evaders in the city.

City officials have thus far requested seven South Korean crypto exchanges to inquire into the holdings of thousands of tax evaders, including Upbit and Bithumb. Officials claim that crypto is increasingly being used as a means of concealing property in South Korea, and this latest initiative is meant to ensure that South Korean tax evaders are held accountable.

These exchanges have been ordered to submit reports on the crypto holdings of more than 8000 individuals, each owing more than US$750 in local taxes.

Last year, Cheongju reportedly collected overdue taxes from 17 individuals, amounting to around US$51 thousand.

Cheongju is not the only city to take such action. In 2021 and 2022, South Korea has confiscated as much as US$180 million worth of cryptocurrency from tax evaders. In Seoul alone, crypto seizures in 2021 amounted to at least US$22 million.

Since 2021, authorities have been allowed to seize funds from users’ private wallets, as well as centralised exchanges.

Damages from cryptocurrency-related crimes have surged 118 per cent over the last five years in South Korea, reaching around US$800 million last year.

South Korean legislators have also started to pay attention to crypto regulation. Starting next year, businesses that issue deals in cryptocurrency will have to reveal their holdings in their financial statements.

The government has also set up a multiagency investigation unit to clamp down on crypto crime. The unit includes officials from the Financial Supervisory Service, the National Tax Service, Korea Customs Service, as well as prosecutors.