South Korea

Crypto Retrace as South Korea Cracks Down on Crypto Tax Cheats

The crypto market has retraced today after Bitcoin (BTC) failed to hold above the psychologically important $60k price level. The retracement comes at a time when South Korea has announced a crackdown on tax cheats, who are using cryptocurrencies as a way to evade taxes. 

The Korean Herald has reported that the country’s taxman, The National Tax Service, had zeroed in on more than 2400 people, who it believes were using cryptocurrencies to escape from paying taxes on over $32 million worth of assets. The tax agency has already announced that it targets people with more than $8800 in tax arrears and is also recovering cash and other assets shielded from the government.

To increase its success rate in dealing with tax cheats, the Korean tax agency has announced that it is liaising with crypto exchanges to gather investors’ data. Unlike in some countries, crypto trading on Korean-based exchanges can only happen under a person’s real names and other identification details. This makes it easy for the tax authority to monitor trading activities and find out who is not paying taxes. The current push is also supported by the fact that the country has stiff penalties for companies that do not comply with anti-money laundering laws.

News from Korea is a big deal because it is one of the most important countries for crypto trading. A sizeable portion of the global crypto trading activity comes from South Korea, and the numbers are growing. According to the National Tax Service, the number of crypto traders in the country grew by over 300% in 2020. 

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