South Korean City Targets Crypto Holdings of Alleged Tax Dodgers
Tax officials in Jeju City, the capital of the South Korean island province Jeju, have initiated the process of freezing and confiscating the crypto assets of individuals who have allegedly evaded tax payments. This move is part of a broader crackdown, where authorities are investigating 2,962 people for a total of 19.7 billion won (approximately $14.2 million) in unpaid taxes, as reported by local media on Saturday.
During the investigation, tax officials obtained data from major South Korean crypto exchanges, including Bithumb, Dunamu, Coinone, and Korbit. The data revealed that 49 of the alleged tax dodgers held crypto assets worth over $166,269 combined. The Jeju City tax department has employed third-party providers to confiscate and secure these coins to pay off the alleged debts.
Jeju, the largest island in South Korea, is a popular tourist destination with a history of crypto initiatives. In 2021, the city introduced non-fungible token tourist cards and a blockchain-based COVID-19 contact tracing app.
AI-Powered Crypto Transaction Analysis
Hwang Tae-Hoon, head of Jeju City’s tax department, stated that the city will continue to strengthen its response to tax evasion by utilizing new assets, such as virtual assets, to uncover hidden tax sources. The tax department will also leverage AI-based information analysis to obtain high-value tax penalties and promote a culture of honest tax payment.
The number of crypto exchange users in South Korea has exceeded 16 million, accounting for over 30% of the country’s population. This surge in crypto adoption can be attributed to the increased interest in the market after the election victory of US President Donald Trump in 2016.
Crypto-Related Crimes and Regulations
The South Korean government has implemented laws enabling regulatory authorities to confiscate cryptocurrencies, such as Bitcoin (BTC), since 2021. In November last year, the authorities in the city of Paju, northeast of Seoul, announced plans to confiscate and sell the crypto holdings of citizens with unpaid taxes.
In 2022 and 2021, the South Korean government confiscated cryptocurrencies worth $180 million from tax evaders. Additionally, the city administration of Seoul confiscated crypto assets worth $22 million from individuals and company leaders who allegedly evaded taxes.
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