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South Korean municipality to confiscate cryptocurrency from numerous tax delinquents: Report
The South Korean city of Cheongju, which serves as the capital of North Chungcheong province, has announced plans to start seizing cryptocurrency from local tax offenders.
The Cheongju administration has approached seven South Korean cryptocurrency exchanges to investigate the holdings of numerous tax defaulters, as reported by local news agency Yonhap on Aug. 22.
City officials have reportedly instructed trading platforms such as Upbit and Bithumb to examine the crypto assets of 8,520 users who owe a minimum of 1 million won ($750) in local taxes. Following this investigation, Cheongju authorities intend to confiscate cryptocurrency from those who are delinquent in their tax payments, according to the report.
The city administration indicated that cryptocurrencies have increasingly been utilized as a method for hiding assets in South Korea. This new initiative aims to ensure that South Korean residents who have neglected their tax obligations are held responsible.
Upbit and Bithumb did not promptly respond to Cointelegraph’s request for a statement.
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In 2022, the Cheongju administration reportedly recovered overdue taxes from 17 individuals after obtaining information about the cryptocurrency holdings of approximately 16,000 crypto investors. The city managed to collect a total of 68 million won ($51,000).
Confiscations of cryptocurrency related to tax issues have risen in South Korea in recent years. In 2022 and 2021 combined, the South Korean government seized up to 260 billion Korean won ($180 million) worth of cryptocurrencies from tax evaders. In 2021, the city administration of Seoul confiscated crypto valued at 25 billion won ($22 million) from individuals and corporate leaders.
Related: Coin Center responds to US lawmakers’ request for crypto tax guidance
The confiscations occurred shortly after the South Korean government implemented laws permitting regulators to seize cryptocurrencies such as Bitcoin (BTC) from tax delinquents in 2021.
South Korea is not the only nation that seizes cryptocurrency from tax offenders. Last year, Argentina’s tax authority confiscated over 1,000 cryptocurrency wallets associated with delinquent taxpayers in the country. The United States Internal Revenue Service also engages in cryptocurrency confiscations from tax evaders, as noted by IRS deputy associate chief counsel Robert Wearing.
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