Analyst Recommendation

Analysis

South Korea’s Ministry of Planning and Finance said on Monday that as the government seeks new revenue to cover rising welfare costs, South Korea will step up its crackdown on tax evasion by cryptocurrency investors and high-income earners.

The government proposes to amend the tax law so that tax authorities can seize cryptocurrency assets held by tax evaders from next year, even if their cryptocurrency is stored in a digital wallet.

Current regulations make it difficult for authorities to confiscate virtual assets in digital wallets, although those virtual assets that can be retrieved through exchanges can be seized to pay overdue taxes.

Tracking down tax evaders is part of South Korea’s plans to strengthen the supervision of the cryptocurrency market in order to eradicate money laundering and other financial crimes using cryptocurrencies, because President Moon Jae-in hopes to expand the tax base to raise money for welfare spending growth.

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