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Tax authorities in Jeju City, the capital of the South Korean island province of Jeju, have reportedly initiated the procedure of freezing and confiscating the cryptocurrency of individuals suspected of evading tax obligations.
This action is part of a wider initiative that prompted officials to investigate 2,962 individuals in default for a total of 19.7 billion won ($14.2 million), to ascertain if they possessed crypto assets that could be seized to cover the outstanding debts, as reported by local media outlet Newsis on Saturday.
During the investigation, tax officials scrutinized information from prominent South Korean cryptocurrency exchanges such as Bithumb, Dunamu’s Upbit, Coinone, and Korbit, discovering that 49 of the alleged tax evaders held combined crypto assets valued at over $166,269.
The Tax Division of Jeju City has identified these exchanges as third-party debtors to initiate the process of seizing and securing the assets to assist in settling some of the debts owed by the purported tax dodgers.
Tax Division utilized AI to evaluate crypto transaction data
Jeju is South Korea’s largest island and a tourist destination. It has a history with crypto initiatives, including the introduction of non-fungible token tourist cards and a blockchain-driven COVID-19 contact tracing application in 2021.
Hwang Tae-hoon, the Chief of Jeju City Tax Division, stated that the city will “persist in enhancing our response to tax delinquency through new assets such as virtual currencies to thoroughly reveal concealed sources of tax,” according to Newsis.
He remarked that the Tax Division will also keep “pursuing high-value tax delinquents through AI-driven information analysis, aiming to secure significant tax revenue and promote a culture of honest tax payment.”
The number of crypto exchange users in South Korea has exceeded 16 million, or more than 30% of the national population, who turned to the crypto market after it experienced a surge following US President Donald Trump’s electoral victory in November.
Crypto of suspected delinquents on the brink of forfeiture
The South Korean government implemented regulations allowing authorities to confiscate cryptocurrencies such as Bitcoin (BTC) from tax delinquents in 2021.
Related: Australian court ruling could lead to $640M in Bitcoin tax refunds
Officials in the South Korean city of Paju, northeast of the capital Seoul, declared intentions to confiscate and liquidate the crypto assets of residents with unpaid taxes in November last year.
Conversely, in 2022 and 2021 combined, the South Korean government seized $180 million worth of cryptocurrencies from tax evaders.
In 2021, the city administration of Seoul also confiscated crypto worth $22 million from individuals and company executives who were reportedly tax delinquents.
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