South Korean City Targets Crypto for Unpaid Taxes
Paju city officials in South Korea threaten to seize and sell crypto assets of tax debtors, intensifying efforts to curb tax evasion using digital currencies.
Authorities in Paju, South Korea, have issued a strong warning to residents with unpaid taxes, threatening to seize and sell their cryptocurrency holdings if the debts are not cleared by the end of November. Located in Gyeonggi Province, Paju officials announced they are targeting 17 individuals who collectively owe 124 million Korean won (about $88,600), according to a report by Yonhap News on November 18.
The city emphasized its determination to track down the crypto assets of tax evaders, stating that digital currencies cannot be used as a shield to avoid financial obligations. Officials vowed to enforce strict penalties on those trying to hide assets in crypto, highlighting the increasing use of cryptocurrencies to dodge debt collection in South Korea.
This is not the first time Paju has targeted crypto holdings to recover taxes. Back in July, authorities confiscated crypto assets worth 100 million won (around $72,000) from tax defaulters. Officials revealed that some residents deliberately convert their funds into cryptocurrencies to avoid paying taxes, despite having the financial means to settle their debts. By seizing these assets, Paju aims to send a clear message against using crypto as a tool for tax evasion.
Meanwhile, in a separate development, South Korea is exploring innovative uses for blockchain technology in tax management. NongHyup Bank recently partnered with digital asset platform Fireblocks to tokenize value-added tax (VAT) refunds. The project aims to create a prototype system using Fireblocks' tokenization engine, allowing real-time tracking of refunds while minimizing errors and fraud.
Michael Shaulov, Fireblocks' CEO, explained that tokenizing VAT refunds could reduce operational costs and ensure transparency by creating an immutable digital record. The move is part of broader efforts in South Korea to integrate blockchain solutions into public services, enhancing trust between institutions and citizens.
With these measures, South Korea continues to lead in both regulating cryptocurrencies and leveraging blockchain technology for governance. The developments in Paju highlight the dual challenge of ensuring compliance while embracing innovation.
