The South Korean city of Cheongju, located in the capital of North Chungcheong province, has announced plans to crack down on cryptocurrency tax evasion by confiscating digital assets from local tax delinquents. In an effort to hold residents accountable for their tax responsibilities, the Cheongju administration has reached out to seven South Korean crypto exchanges, including popular platforms Upbit and Bithumb, requesting information on the holdings of individuals who owe at least 1 million won ($750) in local taxes.
Cryptocurrencies have increasingly been used as a means of concealing property in South Korea, prompting the city administration to take action. The goal of this initiative is to ensure that tax evaders are held responsible and that cryptocurrency is not exploited as a tool to evade taxes. However, neither Upbit nor Bithumb have responded to Cointelegraph’s request for comment on the matter.
This is not the first time that Cheongju has taken action against tax evasion through cryptocurrencies. In 2022, the administration successfully collected overdue taxes from 17 individuals after obtaining information on their crypto holdings from around 16,000 investors. The city managed to collect a total of 68 million won ($51,000) through these efforts.
The confiscation of cryptocurrencies for tax-related purposes has been on the rise in South Korea in recent years. Between 2021 and 2022, the South Korean government seized a staggering 260 billion Korean won ($180 million) worth of cryptocurrencies from tax evaders. In addition, the city administration of Seoul, the capital of South Korea, seized crypto assets worth 25 billion won ($22 million) from individuals and company heads in 2021.
These confiscations were made possible by the enactment of laws in 2021 that allowed regulators in South Korea to seize cryptocurrencies like Bitcoin (BTC) from tax delinquents. Argentina has also taken similar measures, with its tax authority seizing over 1,000 cryptocurrency wallets linked to delinquent taxpayers in the country. The United States Internal Revenue Service has also been known to seize cryptocurrency from tax evaders.
The South Korean government’s efforts to combat tax evasion through cryptocurrencies highlight the growing need for effective regulation and enforcement in the digital asset space. As cryptocurrencies gain popularity and become increasingly intertwined with financial transactions, governments around the world are grappling with how to ensure compliance and prevent misuse.
In conclusion, the city of Cheongju in South Korea is taking a proactive approach to address tax evasion involving cryptocurrencies. By collaborating with crypto exchanges and seizing digital assets from tax delinquents, the administration aims to hold residents accountable for their tax responsibilities and prevent the misuse of cryptocurrencies to conceal property. These efforts align with broader trends in South Korea and other countries, where governments are stepping up their efforts to regulate cryptocurrencies and combat tax evasion in the digital asset space.
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