The affluent Seoul district of Gangnam is cracking down on tax evaders who fail to pay their local taxes, including property taxes. Since the end of last year, the district has seized 340 million won ($244,796) in crypto from residents who have not fulfilled their tax obligations.
Gangnam, known for being home to many of East Asia’s wealthiest individuals, has ramped up its crypto confiscation initiative in an effort to recoup unpaid taxes. According to a report by Kyunghyang Shinmun, the district has already recovered 200 million won ($144,057) in the first half of the year by confiscating coins from tax evaders.
To identify residents who have not paid their taxes, the district cross-checks its data on unpaid taxes with crypto wallet information from the country’s five fiat-trading crypto exchanges. When crypto assets are found in tax evaders’ wallets, the district freezes the funds and gives them an ultimatum: pay up or risk having their coins liquidated.
Many residents who are keen on cryptocurrencies rush to settle their tax bills before the district sells off their tokens. A tax management official from Gangnam stated that the initiative has led to a significant increase in voluntary payments of outstanding tax bills.
Some residents have attempted to conceal their wealth by using Bitcoin (BTC) and other tokens to avoid paying taxes. In one case, a resident who claimed to not have enough money to pay taxes was found to have more than enough crypto to cover their property tax bill. Another resident with multiple overdue tax bills voluntarily paid their arrears after their crypto assets were frozen by tax officials.
New regulations regarding corporate crypto ownership will enable government entities like Gangnam District to open crypto wallets, making the liquidation process more efficient. The head of the Gangnam District government emphasized that long-term tax evaders will have their virtual assets seized without exception.
In addition to its efforts, the Seoul Metropolitan Government is establishing a cooperative system with autonomous districts to conduct bulk searches and seizures of tax evaders’ crypto funds. This coordinated approach aims to streamline the process of identifying and seizing crypto assets from residents who are not fulfilling their tax obligations.
Meanwhile, the crypto exchange Korbit has partnered with the Busan Customs Office to assist in tracking and seizing crypto from long-term tax evaders. This collaboration will allow tax officials to identify and seize crypto from both active and dormant wallets, in accordance with relevant laws and administrative procedures.
As the cryptoasset ecosystem becomes more institutionalized, collaborations with public institutions like tax offices are becoming increasingly important. Korbit is committed to providing institutional and technical support to help establish a transparent system for paying taxes.
Overall, Gangnam District’s revamped crypto confiscation drive is a proactive effort to ensure that residents fulfill their tax obligations and contribute to the local economy. This initiative reflects the district’s commitment to enforcing tax compliance and holding tax evaders accountable for their actions.