South Korea tax authorities have seized crypto from 5,741 citizens since 2020. Tax officials said that the citizens in question were guilty of tax evasion or defaulting on tax bills.
KBS reported that the data was released by the National Tax Service (NTS), following a request for free information from MP Jin Seon-mi of the National Assembly’s Planning and Finance Committee.
The latest data shows that $13.5 million in coins were seized from nearly 500 individuals. These people, says NTS, are the highest income earners who pay the highest income tax.
In September, NTS announced that it had grabbing a total of $186m in crypto of tax dodgers in the past two years.
Why Are South Korean Tax Officials Seizing Crypto?
NTS’s crackdown has been swift since it successfully convinced the government to revise the National Tax Act.
Doing so allowed to “obtain a legal basis for the mandatory collection of cryptocurrency, so that the tax authorities demand the transfer of virtual currency to tax evaders – and cryptocurrency exchanges,” KBS noted.
Although South Korean crypto traders have not paid capital gains tax on their income, NTS still believes it has a role to play. And the revision of the law effectively opens the door for NTS to oblige domestic crypto exchanges to hand over account details for all South Korean taxpayers suspected of wrongdoing.
The NTS said there was evidence that thousands of citizens had failed to declare their financial income. It is believed that many are trying to hide their income by buying cryptoassets.
It has responded to this with a “compulsory collection” drive that began in the second half of 2020. it appears that some regional tax authorities seized the coins. In most cases, crypto holders own it rush to pay the outstanding tax bill in fiat in order to gain access to crypto. But in some cases, NTS seems to have liquidated coins.
In addition to confiscating coins from income and local tax dodgers, NTS has also seized coins in bankruptcy proceedings, as well as foreclosures.