A city in South Korea plans to launch its own virtual asset electronic seizing system next month to seize crypto assets belonging to tax evaders.
According to South Korean media outlet Energy Kyungjae, the city of Gwacheon has announced that it will launch “its own electronic virtual asset seizing system.” The city regulators hope to use the IT solutions in the wider Gyeonggi Province to identify crypto wallets belonging to tax evaders living in the city in the near future.
Using the new seizing system, Gwacheon City will mainly target 361 high-income citizens who have been identified for not paying over 3 million won in tax, due to the average amount being around 18.8 billion won. According to the report, these individuals are suspected of hiding their wealth in crypto as a way to avoid paying higher taxes.
In South Korea, the crypto tax proposal has not been put into place yet due to regulators agreeing to postpone the rumored 20% crypto tax to as late as 2027. Despite this delay, the South Korean government has given local tax agencies in certain regions the rights to seize crypto belonging to residents who under scrutiny for tax evasion.
Before seizing any assets, Gwacheon city officials promise to issue a warning to targeted citizens, encouraging them to pay the additional tax to avoid seizure of their crypto assets. If citizens are not able to pay the additional tax amount before the set deadline, then authorities will move forward with seizing their crypto assets.
The process of collecting additional tax amounts will begin in the first half of 2025 using the new IT solution.
Gwacheon City Tax Division Chief Kang Min-ah said that the deployment its own electronic crypto seizing system is vital for making sure the tax system is fair for all citizens that dutifully pay taxes.
“We will realize fair taxation through strong responses to tax avoiders and actively block tax evasion through the seizure of virtual assets,” said Kang.
In the past five years, Gwacheon City has reportedly seized approximately 300 million won worth of virtual assets held by high-income local tax evaders. In 2024 alone, authorities claim to have seized 110 million won worth of digital assets.
