Seoul’s Gangnam to Begin Seizing Crypto from Local Tax Dodgers

South Korea Tax

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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August 6, 2024 23:00 EDT

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Seoul’s Gangnam District says it will probe almost 2,000 residents to check if they have crypto holdings as part of a crackdown on tax evasion.

Per Naeil Shinmun, officials in Gangnam announced on August 6 that they would “check for and seize cryptocurrencies such as Bitcoin (BTC).”

Seoul: Gangnam Begins Crypto Tax Crackdown

The district, in the Southern part of the South Korean capital, is the most affluent part of the country. It is home to some of South Korea’s richest people.

However, Gangnam officials say that hundreds of residents have fallen behind on local tax bills. And they want to use a new crypto monitoring tool to punish tax evaders by confiscating their tokens.

Officials said they would investigate 1,991 people starting in August. They aim to wrap up their investigations by the end of October.

The officials say the residents each owe Gangnam taxes “$2,177 or more.” Investigators will check to see if the residents “own virtual assets,” and will “seize them” if they find BTC or altcoin holdings.

Officials Will Use Crypto Exchange Data to Hunt Tax Evaders

Gangnam officials say that tax evaders have failed to pay levies worth over $15.1 million. The move comes just days after a similar announcement in another of South Korea’s richest cities.

On August 2, local government officials in Ansan, Gyeonggi Province, said they would start using a “virtual asset platform seizure system” to “recover unpaid local taxes.”

Gangnam will use the same system to comb data from major South Korean crypto exchanges to try to identify residents’ exchange-linked bank accounts and wallets. They will then check this information against unpaid local tax bills.

South Korean local governments have been given powers to freeze crypto wallets and demand payment if they can successfully identify tax evaders with hidden assets.

If residents fail to settle their tax bills, Gangnam will have the power to forcibly liquidate tokens and collect the fiat from the token sales.

Seoul has successfully used a pilot version of this system before. In 2021, the city seized cryptoassets from 1,566 individuals and 676 companies in a similar crackdown.

South Korea’s policymakers urged calm against a global market rout that has sent the country’s top companies plunging in stock markets https://t.co/0ddxfHMhb4

— Bloomberg Markets (@markets) August 6, 2024

Gangnam District Mayor Cho Seong-myeong said that “tax revenues are decreasing” as “residents’ demands on the administration are increasing.” Cho explained:

“That is why we are making multi-faceted efforts to overcome our lack of financial resources. We will fight back against tax evaders to ensure justice for honest taxpayers.”