South Korea seizes crypto assets from wealthy tax dodgers

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A television host and a doctor are among thousands of wealthy South Koreans whose cryptocurrency holdings have been seized in a tax sting as a crackdown intensifies in one of the world’s most active markets for trading digital assets.

More than Won53bn ($47m) of bitcoin, ethereum and other crypto assets were confiscated from 12,000 people accused of tax evasion following a months-long probe, according to officials from the Gyeonggi provincial government, which oversees the greater Seoul area.

Governments worldwide have sought to take a more active role in regulating cryptocurrencies in response to a years-long boom in unregulated trading and mining. Bitcoin has experienced a roller-coaster ride this year, surging above $60,000 before plummeting to below $30,000 this month.

“We will do our utmost to protect law-abiding taxpayers and fulfil our fair taxation mandate by probing and tracing assets that tax dodgers may be concealing in the midst of the recent cryptocurrency trading fervour,” said Kim Ji-ye, director-general of the Gyeonggi Province Fairness Bureau.

The seizures followed a broader probe into tax owed by about 140,000 people and marked the latest in a series of measures to tighten oversight of crypto markets by financial regulators in South Korea.

Gyeonggi officials said it was the largest “cryptocurrency seizure for back taxes in Korean history” and noted that local exchanges had been used to conceal assets because they did not collect the resident registration numbers of account holders.

To track down their account details at the cryptocurrency exchanges, investigators compared mobile phone numbers registered by the tax evaders.

Officials said the cases included: a “renowned home shopping channel show host” who owed Won20m in tax but held Won500m in ethereum and other cryptocurrencies; a property owner of about 30 residences who owed Won30m in income tax and held Won1.1bn in crypto assets; and a doctor who had failed to pay about Won17m in overdue taxes but owned Won2.8bn in bitcoin.

Authorities added that they would begin insolvency and liquidation proceedings of the assets if the “habitual and major tax dodgers” did not voluntarily pay their overdue taxes.

Many of South Korea’s 60 crypto exchanges are battling to meet regulatory conditions to operate beyond September.

The Financial Services Commission, the regulator, has set a deadline for Korean exchanges to partner with local banks and open real-name accounts for customers. But local lenders are resisting partnering with the scores of smaller exchanges over fears of being exposed to money laundering and other financial crimes.

The Korean government is also drawing up plans to impose an income tax on cryptocurrency trading.

Additional reporting by Kang Buseong and Song Jung-a in Seoul

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