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2,416 tax dodgers caught exploiting cryptocurrencies

Posted March. 16, 2021 07:28,   

Updated March. 16, 2021 07:28


The tax authorities have caught the illegal activities of about 2,400 tax dodgers, most of them high-income earners such as doctors and financiers. This marks the first case where cryptocurrencies have been abused for property concealment and tax evasion in South Korea.

The National Tax Service announced Monday that it had collected tax arrears worth about 36.6 billion won from 2,416 tax evaders who bought virtual currencies to conceal their property. Type of cryptocurrencies included Bitcoin, Ethereum, and Ripple. Among them was a doctor who had concealed 3.9 billion won in the form of cryptocurrencies when 2.7 billion won was in arrears.

The tax evaders abused the cryptocurrency’s covert nature as it is hard to identify even when the tax authorities are checking financial accounts for arrears. While it takes a bank account under a real name to purchase cryptocurrencies, once the money is transferred from bank accounts to the virtual currency exchanges, it becomes quite tricky to track down the records. The tax authorities are of a view that the tax dodgers intentionally exploited this loophole.

“We’ve seized their withdrawal claims and withheld their right to liquidate the cryptocurrencies until they pay back their arrears,” a tax official explained. “With the prices of Bitcoin skyrocketing, some implore to have their claims returned and promise to pay back at any cost.”

Choong-Hyun Song balgun@donga.com