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South Korean city warns crypto seizure for tax debts

South Korean city warns crypto seizure for tax debts

GrafaGrafa2024/11/19 17:00
By:Isaac Francis

Paju city officials in South Korea have issued notices to 17 residents with unpaid taxes totaling 124 million Korean won (approximately $88,600), warning that their cryptocurrency holdings will be seized and sold if debts are not paid by the end of November.

The authorities emphasised their dedication to tracking down crypto assets and enforcing penalties on tax evaders.

Local media outlet Yonhap News reported on November 18 that the city aims to prevent individuals from using digital assets to conceal funds.

Officials stated that converting money into crypto to avoid taxes has become more common in South Korea, underscoring that such actions would not prevent asset seizures.

This recent move follows a similar action by Paju authorities on July 29, when they confiscated around $72,000 in crypto assets from tax delinquents.

The city noted that despite some residents’ financial ability to pay, funds were deliberately converted to cryptocurrencies to avoid tax payments.

The practice of targeting crypto assets for tax collection reflects a broader effort by South Korean officials to ensure compliance with tax laws.

Authorities highlighted that this measure sends a strong message that crypto cannot be used as a tool to evade financial responsibilities.

Meanwhile, in related news, NongHyup Bank in South Korea is exploring the use of tokenised value-added tax (VAT) refunds.

The bank has partnered with digital assets platform Fireblocks and signed a Memorandum of Understanding on November 13 to develop a prototype for tokenised tax refunds.

According to Fireblocks, this initiative will use its tokenisation engine to streamline VAT refund processes and ensure accuracy.

Fireblocks CEO Michael Shaulov noted that the project would allow real-time tracking of digital assets from issuance to settlement, reducing the risk of manual errors and fraud.

He added that this approach provides an “immutable record,” fostering trust between clients and financial institutions.

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