The government of Cheongju City, located in the central region of South Korea, is looking to confiscate virtual assets such as Bitcoin from tax evaders.

According to a local media report on August 22, the city authorities sought cooperation from seven crypto exchanges, including Upbit and Bithumb, to punish these delinquents.

These exchanges have been ordered to submit a report on the crypto holdings of 8,250 people, each owing over 1 million South Korean won ($747) in local taxes.

Upon completing this task, the Cheongju city authorities will review the acquired data before seizing and liquidating these assets to obtain the outstanding taxes. 

Crypto Assets As A Tool For Tax Evasion In South Korea

Due to the anonymity that comes with cryptocurrency, these assets are commonly tagged as a weapon for tax evasion. 

Once again, this notion was highlighted by the government of Cheongju City, which stated that cryptocurrencies are commonly used to hide one’s income in South Korea, thus, the reason for this asset confiscation initiative.

Interestingly, this would not be the first time such an event has occurred in a South Korean city. In 2022, Cheongju authorities requested a report on the crypto holdings of 16,000 individuals before proceeding to seize 68 million won ($51,000) from 17 investors. 

In South Korea, crypto asset seizure for tax evasion is a common practice as the nation’s Supreme Court considers these assets to represent legitimate property interests and, thus, subject to confiscation by national authorities. 

According to a “Status of Seizure of Virtual Asset” report submitted before the South Korean National Assembly in September 2022, the Asian nation’s tax regulators had seized 259.79 billion won ($194.15 million) for tax arrears between 2021 and 2022. 

Of these values, the amount of assets confiscated in the province of Gyeonggi-do, accounted for the highest value at 53.04 billion won ($39.65 million), followed by the nation’s capital Seoul with 17.84 billion won ($23.24 million).

Crypto Regulations Continue To Step Up In South Korea

In other news, the South Korean government continues introducing more regulations to rid its crypto market of all illegal activities allegedly trying to protect users’ interests. 

South Korea is deemed one of the most formidable crypto hubs in the world, with data from Coinhills showing the Korean won to be the second most-traded national currency for Bitcoin after the United States dollar.

In July, the nation’s government established a joint crypto crime taskforce consisting of 30 persons from several agencies, including the National Tax Service, the Financial Supervisory Service, etc. 

In addition, to improve transparency in the crypto space, the country’s Financial Service Commission recently announced that businesses that issue deals in cryptocurrency will be mandated to reveal their holdings in their financial statements starting in 2024.