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- South Korea’s taxation watchdog, the National Tax Agency (NTS) has clamped down on several tax violators.
- Move comes amid government concerns to protect legitimate investor concerns and to properly regulate cryptos.
- Total recovered assets from the nationwide operation amounted to about 36.6 billion won.
South Korea is one of the few countries where trades of cryptocurrency volumes has seen an explosion. Tax authorities were mindful of this fact and launched an impromptu major nationwide operation to recover unpaid taxes from crypto investors.
Cryptos viewed as a safe haven
By virtue of blockchain’s inherent anonymity and decentralization, cryptocurrencies, a use case of blockchains, are widely viewed as a realm free of any government’s reach and authority. However, such a hypothesis is fallacious. Certain citizens invest huge amounts of fiat currencies into tokens in the hopes of it being a non-taxable store of value. However, vague yet strict regulatory protocols are in place and any violation is subject to penalty under the law.
In recent times, Asia is a highly fertile ground for innovations and investments in crypto technology. South Korea too has faced massive expansion in the crypto realm. In just a year, the number of investors has increased from 390,000 to about 1.59 million. Exchanges in the country such as Coinone, Kobit, Bithumb and Upbit have reported an average trade of 8 trillion won per day in contrast to the 770 billion won last year. Interestingly enough, on March 14, the country recorded 16.6 trillion won in crypto trades compared to 16.5 trillion and 11.4 trillion won in the KOSPI and KOSDAQ exchanges.
Penalties to be introduced for non-compliance
The National Tax Agency (NTS) has cracked down on about 2,400 individuals on suspicion of illegally concealing their cryptographic assets. The impromptu operation was mainly targeted at individuals with unsettled taxes in excess of 10 million won and identified hidden assets to the tune of 36.6 billion won. The accurate identification of offenders was made possible with the help of intelligence shared by domestic cryptocurrency exchanges.
In order to bolster its anti-money laundering efforts, the government has issued directives to all exchanges to authenticate their customers’ real names. The Financial Security Board (FSC) also plans to bring about penalties for exchanges that do not comply with their rules. The country’s tax authorities acknowledged the large scale prevalence of tax evasion and vowed to recover all hidden assets at the earliest.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
