Over 200 Residents Lose Crypto In South Korea Tax Crackdown

Cheongju city authorities have moved to collect unpaid local taxes by seizing cryptocurrencies from residents, according to ￰0￱ 2021, officials say they targeted 203 people who failed to pay local ￰1￱ those, crypto from 161 individuals was already frozen or taken, with the city estimating the recovered value at about 1.5 billion won (roughly $1.1 million). City Opens Exchange Account According to city statements, Cheongju created a trading account on a domestic crypto exchange to make seizure and conversion ￰2￱ change matters because it lets officials not only freeze assets but also sell them and apply the proceeds to overdue tax ￰3￱ told reporters they now have a clearer path to turn crypto holdings into cash for tax ￰4￱ The Seizures Are Carried Out Reports describe a multi-step ￰5￱ offices identify residents with unpaid ￰6￱ then request information from exchanges to see whether those people hold virtual ￰7￱ ownership is confirmed, exchanges are ordered to suspend transactions or to transfer the assets to the municipal ￰8￱ the taxpayer does not settle the debt, the city may liquidate the holdings and use the proceeds to cover what is ￰9￱ Local Governments Have Taken Similar Steps Several other South Korean cities and districts have used similar ￰10￱ City investigated 2,962 people for unpaid taxes and found 49 of them holding crypto worth about 230 million won.

Jeju’s wider unpaid-tax list totaled about 19.7 billion won. Gwacheon, in Gyeonggi Province, built an “electronic virtual asset seizing system” and has recovered roughly 300 million won over recent years, targeting residents who owe more than three million won in local ￰11￱ sent notices to 17 people who owed about 124 million won and has previously seized around 100 million won in similar ￰12￱ And Concerns The moves underline how local governments are pressing exchanges for data and exercising legal powers to collect ￰13￱ citizens and observers worry about transparency and due ￰14￱ include how quickly exchanges must act, whether taxpayers receive fair notice, and how volatility is handled when assets are ￰15￱ also note growing use of data tools, including AI, by some cities to find undeclared ￰16￱ Officials Say They Want Compliance Based on reports, city leaders framed the actions as an effort to stop tax evasion through virtual ￰17￱ have warned residents that cryptocurrency cannot be used to hide from tax obligations.

Still, legal challenges could arise, and appeals from affected residents may push some cases into the ￰18￱ image from Unsplash/Matthew Schwartz, chart from TradingView