The city authorities of Cheongju in South Korea have unveiled plans to seize cryptocurrency holdings from local tax delinquents. This new initiative underscores the city’s commitment to upholding financial responsibilities and preventing the misuse of cryptocurrencies for evading taxes.
Cracking Down on Tax Evasion
The administration of Cheongju has taken a proactive stance in curbing tax evasion as reported by local news agency, Yonhap. This is by reaching out to seven prominent South Korean crypto exchanges. These exchanges were tasked with investigating the crypto assets of 8,520 users who owe a minimum of 1 million won ($750) in local taxes and they include Upbit and Bithumb.
This collaborative effort seeks to identify individuals who have evaded their tax obligations and hold them accountable for their actions.
Cryptocurrencies have gradually emerged as a preferred avenue for concealing assets in South Korea. Recognizing this trend, the city administration of Cheongju is determined to put an end to such practices. The initiative strives to ensure transparency and fairness in tax payment. This is by targeting tax delinquents who have used cryptocurrencies to evade their dues.
Previous Success and Future Endeavors
Notably, this isn’t the first time Cheongju has taken decisive action against tax evasion in the cryptocurrency realm. In 2022, the city administration successfully collected overdue taxes from 17 individuals. This they did by leveraging insights gained from analyzing the cryptocurrency holdings of approximately 16,000 investors.
The total recovered amount reached 68 million won ($51,000), signaling the efficacy of this approach.
Moreover, South Korea has been witnessing a surge in cryptocurrency confiscations linked to tax evasion cases. The combined efforts of the government in 2021 and 2022 led to the seizure of a staggering 260 billion Korean won ($180 million) worth of cryptocurrencies.
Further, the city administration of Seoul, the capital of South Korea, also played a pivotal role by confiscating cryptocurrencies worth 25 billion won ($22 million) from both individuals and company heads.
Legal Framework and Global Precedents
Furthermore, the legal landscape in South Korea underwent a significant shift in 2021. Then, laws were enacted to grant regulators the authority to seize cryptocurrencies like Bitcoin from tax delinquents. This further paved the way for more effective measures against tax evasion. Notably, South Korea isn’t alone in this endeavor.
Notably, Argentina’s tax authority and the United States Internal Revenue Service have also taken steps to confiscate cryptocurrencies from tax evaders, showcasing the global commitment to fostering tax compliance.
Read More:
Oman Unveils $350M Crypto Mining Center to Drive Economic Digitalization
Blockchain Capital Co-Founder Pursues Legal Action Against Hacker for $6.3 Million SIM-Swap Theft