South Korean City Cheongju Targets Cryptocurrency to Settle Tax Debts

In a striking move, Cheongju, North Chungcheong’s provincial capital, intends to confiscate cryptocurrency assets from local tax defaulters.

A Sweeping Inquiry by Cheongju Authorities

On August 22nd, sources reported that Cheongju’s administration had engaged seven prominent South Korean cryptocurrency exchanges. Their aim? To delve deep into the crypto holdings of an estimated 8,520 users. Each user reportedly owes the local treasury upwards of 1 million won (approximately $750).

High-profile trading platforms, including giants like Upbit and Bithumb, have been roped in. The endgame for the city officials? Seizing cryptocurrencies from these tax defaulters, as the report suggests.

The Cheongju administration points to a concerning trend: an escalating use of cryptocurrencies for masking assets in South Korea. This innovative strategy is designed to bring to justice those evading tax duties.

Past Endeavors Yielding Results

In the preceding year, Cheongju showed its might. It extracted delayed taxes from 17 defaulters, drawing upon information related to roughly 16,000 cryptocurrency aficionados. This effort netted the city 68 million won (close to $51,000).

Over the past couple of years, South Korea has witnessed a surge in tax-induced cryptocurrency confiscations. Merging the figures from 2021 and 2022, an astounding 260 billion Korean won (around $180 million) in cryptocurrency was seized from tax evaders. Notably, in 2021 alone, Seoul, the nation’s capital, confiscated cryptocurrencies amounting to 25 billion won (an estimated $22 million). That was predominantly from individuals and business tycoons.

It’s important to note that this uptick followed the South Korean government’s 2021 legislation. The new laws empowered regulatory bodies to confiscate cryptocurrencies like Bitcoin from defaulters.

A Global Shift Towards Cryptocurrency Confiscation

While South Korea’s moves are notable, they are not unique. In a similar vein, Argentina’s tax agency clamped down on over 1,000 cryptocurrency wallets linked to tax-dodging residents last year. On American shores, the IRS is no stranger to seizing cryptocurrencies from those evading taxes.

As governments worldwide grapple with the challenges digital currencies pose, it’s evident that tax evaders can’t hide behind cryptocurrency’s relative anonymity any longer.

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