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South Korea takes cryptocurrencies from rich tax dodgers

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

More than Won53bn ($ 47 million) of bitcoin, ether and other cryptocurrencies have been confiscated by 12,000 people accused of tax evasion after a month-long probe, according to Gyeonggi provincial government officials, who monitor most large area of ​​Seoul.

Governments around the world have sought to take a more active role in this regulating cryptocurrencies in response to a boom of years in unregulated trade and mining. Bitcoin experienced a roller coaster run this year, above $ 60,000 before falling under $ 30,000 this month.

“We will do our utmost to protect law-abiding taxpayers and fulfill our fair tax mandate by probing and tracing the assets that tax dodgers can hide amid the recent fervor of cryptocurrency trading,” said Kim Ji-ye , director general of the Justice Office of Gyeonggi Province.

The seizures followed a wider probe into the tax owed by about 140,000 people and is the latest in a series of measures to tighten surveillance of cryptographic markets by financial regulators in South Korea.

Gyeonggi officials said it was the largest “cryptocurrency seizure due to arrears of taxes in Korean history” and noted that local exchanges have been used to hide assets because they have not collected resident registration numbers. of its account holders.

To reinforce their account details in cryptocurrency exchanges, investigators compared mobile phone numbers recorded by tax evaders.

Officials said the cases included: a “renowned host of the home shopping channel” who owed Won20m in taxes but kept Won500m in ether and other cryptocurrencies; a property owner of about 30 residences who owed Won30m in income taxes and hold Won1.1bn in cryptocurrencies; and a doctor who had not paid about Won17m in expired fees but owned Won2.8bn in bitcoin.

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Officials have added that they would have to initiate insolvency and liquidation proceedings on the assets if the “habitual and principal tax dodgers” do not voluntarily pay their expired taxes.

Many of South Korea’s 60 cryptocurrency exchanges are struggling 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 to open real-name accounts for customers. But local financiers are reluctant to associate themselves with dozens of smaller exchanges for fear that they will be exposed to money laundering and other financial crimes.

The Korean government is also developing plans to impose a new income tax on cryptocurrency trading.

Additional reports from Kang Buseong and Song Jung-a in Seoul


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