Cheongju, the capital of South Korea's North Chungcheong Province, has revealed plans to seize cryptocurrencies from local residents who owe taxes. The local government of Cheongju has reportedly contacted seven major South Korean cryptocurrency exchanges, including Upbit and Bithumb, to investigate the crypto holdings of around 8,520 individuals who owe at least 1 million won (approximately $750) in taxes. Once the investigations are completed, authorities in Cheongju intend to proceed with the confusion of cryptocurrencies from those who have evaded taxes.
The move comes in response to the growing use of cryptocurrencies in South Korea as a means to conceal assets. The Cheongju government's objective is to hold tax evaders accountable and ensure that they fulfill their tax obligations. In the past year, the Cheongju government managed to collect overdue taxes from 17 individuals after receiving information about the cryptocurrency holdings of around 16,000 cryptocurrency investors, generating a total of 68 million won (approximately $51,000).
Cryptocurrency-related confiscations due to tax evasion have been on the rise in South Korea. In both 2021 and 2022, the South Korean government confiscated cryptocurrencies worth up to 260 billion won (about $180 million) from tax evaders. In 20 21, Seoul, the capital city of South Korea, seized cryptocurrencies worth 25 billion won (around $22 million) from individuals and business leaders. These seizures are a result of regulations passed by the South Korean government, granting authorities the power to seize cryptocurrencies ies as part of their efforts to enforce tax compliance.
This practice is not unique to South Korea, as other countries have also seized cryptocurrencies from individuals evading taxes. For instance, Argentine tax authorities confiscated over 1,000 cryptocurrency wallets belonging to delinquent taxpayers. The Intern al Revenue Service (IRS) in the United States is similarly involved in the confusion of cryptocurrencies from individuals evading tax payments, a fact confirmed by Robert Wearing, deputy chief counsel of the IRS.
