South Korea confiscates cryptocurrency assets from wealthy tax evaders

A TV host and a doctor are among thousands of wealthy South Koreans whose cryptocurrency has been confiscated in a tax, as crackdowns are intensifying in one of the world’s most active markets for digital asset trading.

According to Gyeonggi provincial government officials, who oversee the Greater Seoul area, 12,000 people accused of tax evasion were confiscated after a more than $ 53 billion ($ 47 million) investigation into bitcoins, ether and other cryptographic assets.

Governments around the world have tried to play a more active role cryptocurrency regulation in response to a boom years ago unregulated trade and mining. Bitcoin has experienced a roller coaster ride this year, surpassing $ 60,000 before plummeting below $ 30,000 this month.

“We will do our utmost to protect law-abiding taxpayers and fulfill our fiscal mandate by justifying and tracking assets that tax evaders can disguise amid the recent commercial fervor of cryptocurrencies,” said Kim Ji-ye, CEO of the Gyeonggi Province Equity Office.

The seizures followed a broader investigation into the taxes owed by some 140,000 people and is the latest in a series of measures to tighten supervision of cryptocurrency markets by financial regulators in South Korea.

Gyeonggi officials said it was the largest “confiscation of cryptocurrencies by later taxes in Korean history” and noted that local exchanges had been used to hide assets because they did not collect residents’ registration numbers from holders of account.

To track their account details on cryptocurrency exchanges, researchers compared the cell phone numbers recorded by tax evaders.

Officials said the cases included: a “prestigious host of the home shopping channel program” who owed Won20m in taxes but had Won500m in ethereum and other cryptocurrencies; an owner of about 30 residences who was supposed to earn 30 million in income taxes and who had 1.1 billion euros in cryptographic assets; and a doctor who had not paid some Won17m in overdue taxes, but who owned Won2.8bn in bitcoin.

Officials added that they would initiate insolvency and liquidation proceedings for the assets if the “usual and principal tax evaders” do not voluntarily pay their overdue taxes.

Many of South Korea’s 60 cryptocurrency exchanges are struggling to meet regulatory requirements to operate beyond September.

The Financial Services Commission, the regulator, has set a deadline for Korean exchanges to partner with local banks to open real-name accounts for customers. But local lenders are reluctant to partner with some twenty smaller exchanges for fear of being exposed to money laundering and other financial crimes.

The Korean government is also working on plans to impose a new income tax on the cryptocurrency trade.

Additional reports from Kang Buseong and Song Jung-a in Seoul