Thousands of wealthy residents of South Korea got some hard news in the last few days about cryptocurrencies. The crypto-friendly country of South Korea started a massive tax operation in which it seized crypto holdings from wealthy people such as a television host and a doctor.
The government seized over 53 billion KRW (47 million USD) worth of Bitcoin, Ethereum, and other cryptocurrency assets. They seized this from a whopping 12,000 people pinned by policymakers for tax evasion. The news and action come after a months-long investigation. The information about the effort was made public by the Gyeonggi provincial government which monitors the Seoul area.
This comes as almost no surprise. South Korea is one of the world’s most active marketplaces for cryptocurrencies. And policymakers worldwide began vowing to tackle cryptocurrency regulation. This is a natural response to the years-long explosion of unregulated trading and mining. Bitcoin saw a roller-coaster of a year in 2021 since it climbed to more than 60,000 dollars and fell to under 30,000 dollars in June. We can track this to the whimsical tweets of billionaire Tesla founder Elon Musk.
Protecting Taxpayers Above Cryptocurrencies
Kim Ji-ye, director-general of the Gyeonggi Province Fairness Bureau, told the media that their goal was protecting law-following taxpayers. The other aim was to fulfill the bureau’s fair taxation mandate by investigating and tracking down assets that tax dodgers may be hiding.
The government first found that around 140,000 people owned tax, so it decided to tighten the grip on cryptocurrency markets.
This is undoubtedly the biggest crypto seizure for back taxes that ever occurred in Korea. People used local crypto exchanges to hide assets since they didn’t ask users for resident registration numbers of account holders.
Investigators thus had to use the mobile telephone numbers registered by the tax dodgers. This lets them pin down account details of users on the cryptocurrency exchanges.
The mentioned doctor, for instance, didn’t cash out around 17 million KRW in late taxes but did own 2.8 billion KRW in coveted digital gold that is Bitcoin.
Authorities also said that they would start monitoring insolvency and liquidation proceedings of the assets if those big tax evaders don’t begin paying their overdue taxes.