City of Seoul seizes cryptocurrencies from tax offenders

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The Seoul metropolitan government announced on Friday that it has seized the 'cryptocurrencies of hundreds of top tax delinquents who hid their assets in digital form'. This makes it the first South Korean local government's attempt to stop 'dodgy cryptocurrency transactions' and 'crypto tax evaders.'

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According to Yonhap News Agency, 'the city government said its tax collection department found the cryptocurrencies of 1,566 individuals and heads of companies in three cryptocurrency exchanges and seized more than 25 billion won (US$22 million) in virtual assets from 676 of them. 

Every one of the 676 individuals owed the government 28.4 billion in overdue taxes, the Government said. 

They added that, since the cryptocurrencies were seized, only 118 of them have paid back a total of 1.26 billion. That is a lot of money!

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In a press release, the city government stated that, "We are continually being asked by delinquent taxpayers to refrain from selling their cryptocurrencies as they will pay their taxes. We believe the taxpayers expect the value of their cryptocurrencies to increase further due to the recent spike in the price of cryptocurrencies and have determined they will gain more from paying their delinquent taxes and having the seizure released". 

The city government added that for example, one of the apparent fraudsters, the Head of a Hospital who owned 12.5 billion won worth of cryptocurrencies; immediately paid 580 million out of the 1 billion won he owed in unpaid taxes. He also provided security for the rest and requested that his cryptocurrencies not be sold'. 

Another case was a delinquent taxpayer who owes 20 million. That individual has also asked that the 3 million which was seized in virtual assets not be sold until two years later, saying 'he expects them to grow to a size great enough to cover his delinquent taxes and leave some for the taxpayer, too. 

Not surprisingly, Bitcoin was the cryptocurrency of choice amongst the tax offenders. 

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According to the government, the assets seized were as follows: Bitcoin at 19 per cent, followed by DragonVein and Ripple at 16 per cent each, Ethereum at 10 per cent and Stellar at 9 per cent. 

Various other cryptocurrencies accounted for the remaining 30 per cent.

The city government has announced 'it will go after the virtual assets of the remaining 890 people who have been identified'. 

Cryptocurrency is a type of digital asset that is an intangible, digital currency that uses a highly sophisticated type of encryption called 'cryptography', sometimes making it the currency of choice for 'shady finance' transactions.

Bitcoin has grown to become a huge source of value in the past few months, and it certainly appears that the more in-demand it gets, the more people want in.

'Virtual Assets' will begin to be taxed from next year in South Korea, angering many crypto enthusiasts. In a country where Cryptocurrency is extremely popular, some people are accusing the South Korean Government of 'discrimination against Bitcoin'. These advocates have even filed three petitions to the Korean presidential Blue House in the past three months, 'voicing increasing displeasure with what they view as blatant government discrimination against virtual assets.'

The Government has strongly denied all accusations, however it is yet to be seen what will be the outcome of these petitions.

Read more on the situation here.