The city of Gwacheon has announced plans to introduce an electronic system for seizing virtual assets, according to South Korean media outlet Energy Kyungjae.
This initiative is part of a broader effort to enhance tax enforcement, with officials planning to deploy the technology across Gyeonggi Province to track down cryptocurrency wallets linked to tax evaders in the city.
Although South Korea has not yet implemented its proposed crypto tax, regulators have postponed the 20% levy until at least 2027. However, despite this delay, the government has already granted local tax agencies in certain regions the authority to seize cryptocurrency from residents investigating tax evasion, signalling a firm stance on tax compliance.
Gwacheon city officials have pledged to issue warnings before proceeding with asset seizures to ensure fairness in the process. Targeted individuals will be urged to settle their outstanding tax obligations to avoid losing their crypto holdings. If they fail to make the required payment by the deadline, authorities will move forward with confiscating the assets.
This enforcement effort is set to begin in the first half of 2025, with the newly introduced IT solution playing a crucial role in streamlining the collection of additional tax amounts.
Gwacheon City Tax Division Chief Kang Min-ah underscored the importance of deploying the city’s electronic crypto seizure system, emphasizing that it is essential for maintaining a fair tax system.
“We will realize fair taxation through strong responses to tax avoiders and actively block tax evasion through the seizure of virtual assets,”
Kang stated.
Notably, South Korea plans to establish a permanent unit to combat cryptocurrency-related crimes, formalizing the Joint Investigation Unit (JIU) for Virtual Asset Crimes. Initially, a temporary task force launched in mid-2023, the JIU indicted 41 individuals, arrested 18, and seized assets worth around 141 billion won. Officials believe that making the unit permanent will enhance its capacity to address increasing crypto-related challenges.
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