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Cheongju City Targets Cryptocurrency to Combat Tax Evasion: Over 8,000 Users Under Scrutiny
Cheongju, the capital of North Chungcheong province in South Korea, plans to confiscate cryptocurrency from tax evaders. Partnering with major crypto exchanges, the city targets those hiding assets to ensure fiscal accountability and deter illegal activities in the digital currency space.
Reports from local news agency Yonhap on August 22 reveal that city authorities have instructed trading platforms like Upbit and Bithumb to examine the crypto assets of 8,520 users with outstanding local tax debts exceeding 1 million won ($750). Following the investigation, Cheongju aims to confiscate cryptocurrency from these tax delinquents.
Cryptocurrencies have become increasingly popular for hiding assets in South Korea, prompting the city administration to take action. This initiative ensures that residents who have evaded their tax responsibilities are held accountable.
Earlier this year, Cheongju collected overdue taxes from 17 individuals after obtaining details of the cryptocurrency holdings of approximately 16,000 crypto investors. The city managed to retrieve a total of 68 million won ($51,000).
Cryptocurrency confiscations for tax-related offenses have been on the rise in South Korea. Between 2021 and 2022, the country's government seized approximately 260 billion Korean won ($180 million) worth of cryptocurrencies from tax evaders. The administration seized crypto assets totaling 25 billion won ($22 million) from individuals and company heads in Seoul, the capital city.
These confiscations were made possible by laws enacted by the South Korean government, granting regulators the authority to seize cryptocurrencies such as Bitcoin (BTC). However, South Korea is not alone in pursuing tax evaders in the crypto space.
Last year, Argentina's tax authority seized over 1,000 cryptocurrency wallets belonging to delinquent taxpayers. Similarly, according to IRS deputy associate chief counsel Robert Wearing, the United States Internal Revenue Service has also adopted practices to confiscate cryptocurrencies from tax evaders.
Cheongju's move to confiscate cryptocurrency is a strong message to individuals seeking to evade tax responsibilities. The city's determination to crack down on tax delinquents demonstrates its commitment to upholding fiscal accountability and deterring illicit activities in the crypto sector.
Overall, Cheongju's proactive approach is expected to set a precedent for other jurisdictions as they navigate the challenges of tax evasion in the digital age.
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