South Korean Tax Officials Have Seized Crypto from 5,741 People
South Korean tax authorities have seized crypto from 5,741 citizens since 2020. Tax officials say the citizens in question were guilty of tax evasion or defaulting on tax bills.
KBS reported that data was released by the National Tax Service (NTS), following a freedom of information request from MP Jin Seon-mi of the National Assembly’s Planning and Finance Committee.
The latest data shows that $13.5 million worth of coins were seized from almost 500 individuals alone. These individuals, the NTS said, were top earners who pay the highest band of income tax.
In September, the NTS stated that it had seized a total of $186m worth of crypto from tax dodgers in the past two years.
Why Are South Korean Tax Officials Seizing Crypto?
The NTS’ crackdown has been proceeding swiftly ever since it succeeded in convincing the government to revise the National Tax Collection Act.
Doing so allowed it to “obtain a legal basis for compulsory collection of cryptocurrency, allowing tax authorities to demand the transfer of virtual currency to tax evaders – and cryptocurrency exchanges,” KBS noted.
Although South Korean crypto traders do not yet pay capital gains tax on their earnings, the NTS still believes it has a part to play. And the aforementioned legal revision effectively opened the door for the NTS to oblige domestic crypto exchanges to hand over account details for all South Korean taxpayers the body suspects of wrongdoing.
The NTS says it has evidence that thousands of citizens have failed to declare their financial incomings. It believes that many of these have sought to conceal their earnings by purchasing cryptoassets.
It has responded to this with a “compulsory collection” drive that began in the second half of 2020. The drive has since seen multiple regional tax authorities seize coins. In many cases, crypto holders have hastily paid their outstanding tax bills in fiat so that they could regain access to their crypto. But in some cases, the NTS appears to have liquidated coins.
In addition to confiscating coins from income and local tax dodgers, the NTS has also seized coins in bankruptcy hearings, as well as foreclosures.