South Korea’s Crypto Hunt: Cheongju Moves to Seize Assets from Tax Evaders

• Tax authorities in Cheongju, South Korea, are taking action against local tax evaders in crypto space.
• Investigation targets 8,520 users on Upbit, Bithumb, and other exchanges owing a minimum of $750 in local taxes.
• City plans to seize crypto assets from tax delinquents to establish fair taxation practices.

City authorities in Cheongju, South Korea are gearing up to take decisive action against local tax evaders involved in the cryptocurrency space, as reported on August 22 by local news agency Yonhap. This move comes as the city of Cheongju aims to ensure accountability among residents who have shirked their tax responsibilities 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 the tax delinquents. Apparently, 8,520 users of the platforms owe a minimum of 1 million won ($750) in local taxes.

In a bid to address the growing issue of crypto being employed to conceal wealth in the country, Cheongju’s regulators are taking proactive steps. Once the investigations are complete, the city authorities plan to seize crypto assets from tax delinquents. This approach is part of the broader effort to establish fair taxation practices in the digital asset realm.

In September last year, South Korean tax authorities took hold of 260 billion won ($180 million) worth of crypto assets since 2020 due to tax evasion. Out of the total, 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 proactive in this crackdown, enabled by revisions to tax laws that grant legal authority to demand the transfer of virtual currency from tax evaders and exchanges. The NTS’s approach involves “compulsory collection,” leading to both tax payment settlements and, in some cases, the liquidation of seized coins.

A few months ago, South Korea passed its first independent digital-asset bill aimed at safeguarding investors after the collapse of tokens associated with Do Kwon. The Virtual Asset User Protection legislation defines digital assets, penalizes violations like market manipulation, and grants regulatory oversight to the Financial Services Commission.