Authorities in the South Korean province of Gyeonggi have made the largest tax seizures in history, seizing $ 47 million worth of Bitcoin (BTC) and Ethereum (ETH).
According to coverage reported by the Financial Times, the seizure involved some 12,000 tax evaders. The authority called the action the largest “cryptocurrency seizure for back taxes in Korean history.”
These “tax evaders” committed the crime by connecting their business or investment activities in commercial platforms operating in the country with their phone numbers. The process, while rigorous, had to be done manually as crypto exchanges were unable to fully provide Know Your Customer (KYC) details of delinquent taxpayers. Furthermore, the FT report was unclear which digital currency trading platform was involved in the investigation.
South Korea has a strong commitment to cryptocurrency trading among its citizens, and the country has been taking steps to implement proper regulations. One of them is the law passed by the Korean National Assembly in March 2020. This law requires cryptocurrency exchanges to override customer details via KYC and obtain licenses to operate from banks.
While large exchanges like UpBit have been able to deliver, other smaller trading platforms have struggled to deliver, a situation that was exacerbated by the disassociation of financial institutions from crypto exchanges. In addition to these, South Korea has long been considering applying a 20% capital gains tax on cryptocurrencies, all of which will be facilitated with supported crypto exchanges.
South Korea is one of the countries most receptive to innovations related to blockchain and cryptocurrencies. While cryptocurrencies have flourished in the country in the last decade, the government is taking bold steps to develop its own central bank digital currency, the Digital Won. However, despite its soft stance, the nation has zero tolerance for fraud among crypto entities, as shown by the exchange’s ongoing foray into the Bithumb exchange amid extensive fraud investigation.
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