Cheongju city officials are attempting to take cryptocurrency from everyone who owes the government at least $750 in cryptocurrency taxes.
In a bold move to tackle tax evasion, the South Korean city of Cheongju, the vibrant capital of North Chungcheong province, has set its sights on cryptocurrency confiscation. The administration of Cheongju has issued an ultimatum to seven prominent South Korean crypto exchanges, compelling them to delve into the cryptocurrency holdings of thousands of tax evaders.
The Hidden Vault of Tax Evasion
The administration of the city has requested that well-known trading platforms, including titans like Upbit and Bithumb, carry out exhaustive examinations into the crypto assets of about 8,520 individuals. These people are being investigated by the police for avoiding paying at least 1 million won (about $750) in municipal taxes.
The overall plan is obvious: after the investigation is finished, Cheongju’s officials would use their legal authority to seize bitcoin from people who were found to have broken the law. This strategy indicates the local government’s resolve to stop the growing practice of using cryptocurrencies in South Korea as a means of hiding real estate.
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Accountability Reigns Supreme
Cheongju wants to make sure that no tax evader falls through the cracks by holding those who have disregarded their tax obligations accountable through this innovative project. As the situation develops, Upbit and Bithumb have remained silent in response to Nosisnews’ request for comment.
This initiative builds on prior successes for the city, as the government of Cheongju reportedly recovered unpaid taxes from 17 people in 2022. The city’s meticulous efforts resulted in the collection of a sizeable 68 million won ($51,000), thanks to information regarding the cryptocurrency holdings of roughly 16,000 crypto investors.
In order to combat tax evasion, South Korea, which is no stranger to strict tax policies, has seen an increase in the confiscation of cryptocurrencies. The government confiscated cryptocurrency worth a remarkable 260 billion Korean won ($180 million) from tax evaders in 2021 and 2022 as a result of its strict attitude. The capital city of Seoul responded to the trend by cracking down on tax evaders in 2021 by confiscating cryptocurrency worth 25 billion won ($22 million).
This strong strategy, which comes after the adoption of regulations enabling regulators to seize digital currency like Bitcoin from tax evaders, emphasizes South Korea’s unwavering dedication to upholding fiscal prudence.
While South Korea takes center stage in the crackdown on tax evasion, it’s not alone in wielding the gavel on cryptocurrency confiscation. Argentina’s tax authority and the United States Internal Revenue Service have also dabbled in this realm, ensuring that tax evasion doesn’t find a haven in the world of cryptocurrencies.
Related: South Korea's New Crypto Bill Aims to Protect Investors from Unfair Trading