According to reports, the tax department of Jeju City, South Korea, has begun to freeze and seize cryptocurrencies from those deemed to be evading tax obligations. This action involves investigating 2,962 tax debtors, totaling 1.97 billion Korean won (approximately $14.2 million), to confirm whether they hold cryptocurrency assets that can be seized to repay outstanding debts.
During the investigation, tax officials sorted through data from South Korea's major cryptocurrency exchanges Bithumb, Dunamu's Upbit, Coinone, and Korbit, and found that 49 individuals suspected of tax evasion held cryptocurrency assets worth over 2.3 million Korean won (approximately $166,000).
The tax department of Jeju City has designated third-party debtors from these exchanges to begin seizing and securing these cryptocurrencies to help financially struggling tax evaders repay part of their debts.
The tax department analyzes cryptocurrency trading data through AI
Jeju, as the largest island and tourist hotspot in South Korea, has been closely associated with cryptocurrency-related projects, including the launch of NFT travel cards and blockchain-based COVID-19 contact tracing applications. The head of the tax department stated that they will strengthen efforts to combat tax evasion by utilizing new assets such as virtual assets and will strive to recover large amounts of tax evasion through extensive information gathering via AI analysis, aiming to ensure fiscal revenue.
Fleeing individuals' cryptocurrency assets face seizure
The South Korean government enacted a law in 2021 allowing regulatory agencies to seize cryptocurrencies such as Bitcoin from tax evaders. In November last year, the city of Paju, South Korea, also announced plans to seize and sell the cryptocurrency assets of citizens with tax debts. Meanwhile, since 2021, the South Korean government has seized cryptocurrencies valued at approximately 260 billion Korean won (about $180 million) to offset tax payments.