South Korean City to Launch Electronic Seizing System for Crypto Assets
A city in South Korea is gearing up to launch its own virtual asset electronic seizing system next month in an effort to crack down on tax evaders who are using cryptocurrencies to avoid paying their dues.
The city of Gwacheon has revealed its plans to implement an electronic virtual asset seizing system, with the aim of identifying crypto wallets belonging to tax evaders residing in the city. The system will be part of the broader IT solutions being utilized in the Gyeonggi Province.
Authorities in Gwacheon are targeting 361 high-income individuals who have allegedly failed to pay over 3 million won in taxes, with the total amount owed estimated to be around 18.8 billion won. These individuals are suspected of concealing their wealth in cryptocurrencies to evade taxes.
While a proposed 20% crypto tax in South Korea has been delayed until at least 2027, local tax agencies have been granted the authority to seize crypto assets from residents suspected of tax evasion.
Prior to seizing any assets, Gwacheon city officials will issue warnings to the targeted individuals, giving them the opportunity to pay the outstanding taxes to avoid having their crypto assets seized. If the taxes remain unpaid by the deadline, authorities will proceed with the seizure of the assets.
The process of collecting additional tax amounts is set to commence in the first half of 2025, utilizing the new IT solution implemented by the city.
Gwacheon City Tax Division Chief Kang Min-ah emphasized the importance of deploying an electronic crypto seizing system to ensure a fair tax system for all citizens who fulfill their tax obligations.
“We will ensure fair taxation by taking strong action against tax evaders and actively preventing tax evasion through the seizure of virtual assets,” Kang stated.
Over the past five years, Gwacheon City has reportedly seized approximately 300 million won worth of virtual assets from high-income local tax evaders. In 2024 alone, authorities claim to have seized 110 million won worth of digital assets.