South Korean City to Confiscate Cryptocurrency from Tax Delinquents

Introduction

The South Korean city of Cheongju has announced its plans to confiscate cryptocurrency from local tax evaders. The city administration has requested seven South Korean crypto exchanges to investigate the holdings of thousands of tax delinquents who owe at least 1 million won ($750) in local taxes. Once the inquiry is complete, the city authorities intend to seize cryptocurrency from those who have evaded their tax responsibilities.

Increasing Use of Cryptocurrency for Tax Evasion

According to the city administration, there has been a rise in the use of cryptocurrencies as a means of concealing property in South Korea. In an effort to hold tax evaders accountable, the administration is taking this proactive approach.

Request Sent to Exchanges

Trading platforms like Upbit and Bithumb have been ordered to inquire into the crypto assets of 8,520 users who owe local taxes. The city of Cheongju plans to confiscate cryptocurrency from tax delinquents after the investigation is complete.

Past Success in Collecting Overdue Taxes

In 2022, the Cheongju administration successfully collected overdue taxes from 17 individuals by receiving details of their cryptocurrency holdings from around 16,000 crypto investors. This resulted in a total collection of 68 million won ($51,000).

Increasing Cryptocurrency Confiscations in South Korea

The South Korean government has been increasing its cryptocurrency confiscations in recent years. Between 2022 and 2021, the government seized approximately 260 billion Korean won ($180 million) worth of cryptocurrencies from tax evaders. In addition, the city administration of Seoul confiscated crypto worth 25 billion won ($22 million) from individuals and company heads. These confiscations were made possible after the enactment of laws allowing regulators to seize cryptocurrencies from tax delinquents.

Cryptocurrency Confiscations in Other Countries

South Korea is not the only country that seizes cryptocurrency from tax evaders. In Argentina, the tax authority seized over 1,000 cryptocurrency wallets belonging to delinquent taxpayers. The United States Internal Revenue Agency also practices confiscations of cryptocurrency from tax evaders.