The city officials asked crypto exchanges to investigate the holdings of 8,520 individuals.
The local government claims that crypto is being used more often to hide wealth.
It has been announced that crypto belonging to tax evaders would be confiscated in the city of Cheongju, the capital of North Chungcheong province, South Korea. Local news outlet Yonhap reported on August 22 that the Cheongju authority has asked seven cryptocurrency exchanges in South Korea to investigate the assets of thousands of tax evaders.
Upbit and Bithumb, two cryptocurrency exchanges, have allegedly been asked by city officials to investigate the holdings of 8,520 individuals who are at least 1 million won ($750) behind on their city taxes. Authorities in Cheongju are reportedly planning to seize cryptocurrencies belonging to tax evaders when an investigation into the practice concludes.
Fair Share of Taxes
Moreover, the local government claims that cryptocurrency is being used more often to hide wealth in South Korea. The purpose of this new strategy is to bring those South Korean citizens who have avoided paying their fair share of taxes to justice.
After collecting information on the cryptocurrency holdings of around 16,000 crypto investors in 2022, the Cheongju government allegedly recovered back taxes from 17 people. The city received 68,000,000 won, or around $51,000. In recent years, the South Korean government has seized more digital currencies for tax purposes.
These confiscations occurred shortly after the South Korean government passed legislation in 2021 empowering tax authorities to confiscate cryptocurrencies held by tax evaders. Cryptocurrency belonging to tax evaders is seized in more than just South Korea. More than a thousand crypto wallets belonging to Argentine tax evaders were confiscated by tax authorities in 2022.