South Korean authorities seized $184 million in crypto for unpaid taxes
Despite the South Korean government’s deep interest in metaverse and web 3 technology, the country implements aggressive policies when it comes to regulations and taxation.
As reported by local news agency Yonhap News on Thursday, the South Korean tax authority has seized 260 billion won ($184.3 million) in crypto belonging to tax evaders. However, the agency froze this amount for a time frame between 2021 and 2022.
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Notably, the highest amount confiscated from a single tax evader is $8.87 million, according to the data provided by the country’s lawmaker Kin Sang Hoon. He reported that the accused held Bitcoins and Ripple’s XRP, among other crypto assets.
It is worth noting that under the implied rule in South Korea, crypto exchanges are responsible for providing data about their customers to the tax authorities. Similarly, the agency has been cracking down on tax evaders since the beginning of this year, confiscating crypto assets in the millions.
The tax authority freezes crypto assets of tax evaders after the exchanges have identified criminals on the platforms. Then, if the tax amount remains unpaid, officers sell the confiscated properties at market price.
The report on the seizure of crypto assets against unpaid taxes comes two months after South Korean authorities announced that the decision to apply a 20% tax on crypto profits was postponed until 2025.
Kim Sang-hoon, a member of the National Assembly’s Strategy and Finance Committee and a lawmaker in South Korea’s right-wing People Power Party, gathered information about the seizure of crypto assets. The report also contains statistics from the Ministry of Finance and other agencies.
South Korea has stricter rules
After the TerraLuna collapse, government officials warmed to crypto regulations. Regulators scrutinized many cryptocurrency exchanges operating in South Korea. Consequently, the months-long investigations led South Korean authorities to implement strict laws overly focused on the risks associated with cryptocurrencies.
Subsequently, many crypto exchanges closed their shops due to tightened KYC and AML regulations. While others currently operating in the regime provide data to the authorities about customers under the implied regulations.
Although South Korean authorities initially began freezing crypto-assets of tax evaders in 2020. The 2021 Tax Law Amendment Bill empowered the National Tax Service (NTS) by empowering it to seize crypto-assets without waiting for court approval. The law entered into force on 1 January 2022.
An official explained that this change aims to combat the growing number of tax evaders who use cryptocurrencies to escape their assets.
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The ministry official added at the time;
“Procedures for property seizure cannot be used when the assets to be claimed by the authorities are kept in electronic wallets. The revision will allow direct seizure without a legally approved change in the ownership register. Assets held by tax evaders in the form of digital coins will no longer avoid seizure and confiscation.”
Featured image from Pixabay and chart from TradingView.com
