More than 53 billion won ($ 47 million) in bitcoin, ethereum and other crypto assets confiscated from 12,000 people accused of tax evasion following months-long investigation, officials say the Gyeonggi Provincial Government, which oversees the Greater Seoul Area.
Governments around the world have sought to take a more active role in regulating cryptocurrencies in response to a multi-year boom in unregulated trading and mining. Bitcoin has been on a roller coaster ride this year, topping $ 60,000 before dropping below $ 30,000 this month.
“We will do all we can to protect law-abiding taxpayers and fulfill our fair taxation mandate by probing and tracking assets that tax evaders may be hiding amid the recent fervor in the cryptocurrency trade,” said Kim Ji-ye, General Manager of the Equity Bureau of Gyeonggi Province.
The seizures followed a larger investigation into taxes owed by around 140,000 people and marked the latest in a series of moves to strengthen oversight of crypto markets by financial regulators in South Korea.
Gyeonggi officials said it was the largest “tax arrears cryptocurrency seizure in Korean history” and noted that local exchanges were used to conceal assets because they had not collected resident registration numbers from account holders.
To track down their account details on cryptocurrency exchanges, investigators compared cell phone numbers recorded by tax evaders.
Officials said the cases included: a “renowned home shopping host” who owed 20 million won in tax but held 500 million won in Ethereum and other cryptocurrencies; an owner of around 30 residences who owed 30 million won in income tax and held 1.1 billion won in crypto assets; and a doctor who had not paid around 17 million won in overdue taxes but had 2.8 billion won in bitcoins.
The authorities added that they would initiate insolvency and asset liquidation proceedings if “habitual and major tax evaders” did not voluntarily pay their overdue taxes.
Many of South Korea’s 60 crypto exchanges are struggling to meet the regulatory requirements to operate beyond September.
The Financial Services Commission, the regulator, has set a deadline for Korean stock exchanges to partner with local banks and open real-name accounts for clients. But local lenders are reluctant to partner with dozens of smaller stock exchanges for fear of exposure to money laundering and other financial crimes.
The Korean government is also making plans to impose an income tax on cryptocurrency trading.
Additional reporting by Kang Buseong and Song Jung-a in Seoul