The government seized more than KRW 176 billion of a total exceeding KRW 259.7 billion in crypto assets due to tax arrears. They confiscated KRW 12.5 billion, equivalent to USD 8.8 million, from an individual who had not paid KRW1.43 billion in local taxes.
Since 2020, the South Korean government has seized around USD 184 million worth of cryptocurrencies due to back taxes. The authorities of Seoul, the capital of the Asian country, authorities began confiscating crypto assets from suspected evaders in 2021.
The Government Seizes Almost KRW 260 Billion worth of Cryptocurrencies
According to local news outlets, the South Korean authorities have seized almost KRW 260 billion worth of crypto assets for tax evasion.
The Ministry of Economy and Finance, that of Security and Public Administration, and the National Tax Service (NTS) provided official figures.
The government seized more than KRW 176 billion of a total exceeding KRW 259.7 billion in assets due to non-payment of domestic taxes. Due to local tax arrears, they also confiscated more than KRW 84 billion worth of cryptocurrencies.
Over 30% of the cryptocurrency seized came from Seoul (KRW 17.8 billion), Incheon (KRW 5.5 billion), and Gyeonggi (KRW 53 billion). Since the second half of 2020, the South Korean government has seized crypto assets from alleged tax evaders.
A Taxpayer Pays His Taxes to Keep His Cryptocurrency Investment
The highest amount of crypto they have seized from an individual was KRW 12.5 billion, equivalent to USD 8.8 million. That person, a resident in Seoul, had not paid KRW1.43 billion in local taxes. Besides, he had holdings in 20 cryptocurrencies, including KRW 3.2 billion worth of Bitcoin (BTC) and KRW 1.9 billion in Ripple (XRP).
Bitcoin is trading at around USD 18,994 and has accumulated a 0.9% loss over the last 24 hours. Meanwhile, XRP is worth about 0.494033 and has lost 1.7% of its value in that period, according to CoinGecko.
That South Korean taxpayer decided to pay his duties and keep his investment in cryptocurrencies. When the tax authorities seize a personal foreign exchange account or assets, they sell the coins at the current trading price.
The South Korean Government Takes Strict Measures Against Tax Evasion
The above statistical data on seized cryptocurrencies appeared published in early August. That happened after the NTS promised to take strict measures against tax evasion through cryptocurrencies and exchange platforms.
In early 2022, the South Korean government delayed a 20% tax on crypto-related profits until 2025. The tax, applicable to capital gains over KRW 2.5 million, would enter into force in January 2023.
The relevance of cryptocurrencies in the economic system is increasingly evident, which governments and regulators know well. That has led the South Korean authorities to consider that those assets contribute to committing illegal activities and evading taxes.
Investors should research BTC, XRP, or any other crypto assets before buying them to know their all-time high, behavior, and possible future price. That will help them find the most convenient investment opportunity to minimize the risk of losing money.
By Alexander Salazar