The South Korean Tax Service (NTS) will conduct rigorous scrutiny of cryptocurrency traders. This is due to an increase in the number of people using cryptoassets for tax evasion.
According to local media reports, NTS has already identified more than 2,400 tax evaders who are using cryptocurrencies to hide income totaling KRW 36.6 billion ($ 32 million). Therefore, the South Korean Internal Revenue Service will strengthen measures to combat tax evasion, focusing on the cryptocurrency industry. The agency believes that digital assets can be used for illegal activities and money laundering. Particular attention will be paid to traders convicted of tax evasion in the amount of more than 10 million South Korean won (about $ 8,800). This also applies to trading bonds and other financial assets.
As part of this initiative, NTS has already begun interacting with local cryptocurrency exchanges to obtain detailed reports on customer transactions. Given that cryptocurrency activities are tightly regulated in South Korea, trading in digital assets is only possible using accounts with real names, and accounts must be linked to a bank account. The department began to actively fight against tax evasion due to a sharp increase in interest in cryptocurrencies in South Korea. Over the weekend, activity on some local cryptocurrency exchanges briefly surpassed that of the South Korean stock market. In addition, according to NTS, the number of cryptocurrency investors in the country has increased by 300% over the past 12 months. As a result, the volume of digital asset trading in South Korea has grown eightfold.
This month, the Financial Services Commission of South Korea (FSC) unveiled new rules that would require trading platforms and cryptocurrency firms to pay hefty fines for failing to comply with anti-money laundering (AML) regulations. Due to the tightening of compliance with the requirements of the Financial Action Task Force on Money Laundering (FATF), the South Korean exchange Bithumb has stopped serving traders from 21 countries.
Meanwhile, the country’s government has already approved a 20% income tax on cryptocurrencies if the annual profit from trading cryptoassets exceeds $ 2300.
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