Authorities in South Korea Seize $47M in Crypto From Tax Evaders



Briefly

  • Officers within the South Korean province of Gyeonggi have seized $47 million in cryptocurrencies from tax dodgers.
  • South Korean exchanges are delisting cash forward of latest rules coming into drive.

Officers within the South Korean province of Gyeonggi have carried out one of many largest tax seizures within the nation. The months-long investigation led to the confiscation of $47 million in Ethereum, Bitcoin, and different cryptocurrencies, based on the Financial Times. Officers have known as the occasion the most important “cryptocurrency seizure for again taxes in Korean historical past.”

Gyeonggi is essentially the most populated province in South Korea and consists of the nation’s capital Seoul. 

Officers seized funds from 12,000 tax dodgers by connecting their exercise on cryptocurrency exchanges with their telephone numbers. Investigators needed to parse by way of this knowledge manually as a result of many exchanges didn’t accumulate formal identification of account holders. It’s unclear which exchanges have been included within the investigation. 

South Korea’s regulatory crackdown

Exchanges’ lack of formal KYC identification has been one of many key drivers behind South Korea’s newest regulatory crackdown. 

In March 2020, the Nationwide Meeting of South Korea handed a regulation demanding native exchanges to adjust to anti-money laundering and terrorist financing tips from the Monetary Motion Activity Drive (FATF). Crypto companies, notably exchanges, should additionally earn approval from the Monetary Providers Fee (FSC) and the Korea Web and Safety Company earlier than September 24, 2021. 

This regulation consists of new necessities for figuring out customers in addition to readability on which belongings might be listed. If a mission’s coin has low quantity, inactive growth, or is lacking a transparent channel of communication with its crew, then it’s topic to delisting. 

Upbit, one of many “huge 4” crypto exchanges in South Korea, has already begun delisting a number of cash. The platform was additionally one of many first to earn a regulatory license to proceed working in South Korea.

As for the smaller exchanges, compliance has been troublesome. It’s because platforms should companion with a financial institution to earn their license. Banks have, nonetheless, been reluctant to affiliate with cryptocurrency exchanges, creating what one trade operator has known as an “existential disaster.”  



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