Korea will start confiscating cryptocurrencies from Bithumb and Upbit exchanges to pay taxes

The initiative proposed by the Pohang city government to recover $4,87 million

08.04.2024 - 14:00

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What’s new? The government of the South Korean city of Pohang is developing a “Comprehensive Local Tax Debt Collection Plan for 2024” to collect 6,6 billion Korean won ($4,87 million). The initiative plans to confiscate crypto assets from citizens who owe more than 500 000 Korean won ($368) to the local tax office. Debtors’ accounts on Korean crypto exchanges Bithumb, Upbit, Korbit, and Coinone will be seized and frozen.

Material by Kbsm

What else is known? 5208 residents in the city have debts above a specified amount. The government will find out if they own cryptocurrencies by matching transaction data between debtors and local crypto exchanges.

If a taxpayer is confirmed to own digital assets, the associated account will be immediately seized. If the debtor does not pay the tax voluntarily even after the arrest, the cryptocurrencies will be sold on the exchange market.

Earlier, Korea’s financial intelligence agency proposed to tighten the regulation of crypto exchanges and implement FATF group’s AML rules to block suspicious transactions during pre-trial investigations. The fintech also said that the number of suspicious crypto transactions in the country increased 49% over 2023 to 16 076.

In addition, Korea toughened penalties for violations of the law on the protection of cryptocurrency users. For fraud, market manipulation, and insider trading, violators will receive one year in prison or a fine of 3-5 times the amount of illegally obtained profits.

In February, authorities in Gyeonggi-do City recovered 6,2 billion Korean won (~$4,6 million) in undeclared taxes after implementing a digital system to track cryptocurrency accounts of tax evaders.

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