According to South Korean local media reports dated 3 February 2025, Gwacheon city announced the use of IT solutions to seize and liquidate crypto assets from tax evaders.
The regulators aim to use this platform to identify crypto wallets belonging to tax evaders in the city. Authorities have so far identified 361 high income citizens who have not paid tax on their crypto gains
Authorities think that the identified netizens are hiding their wealth in crypto assets to avoid paying heavy taxes. With the average amount being 18.8 billion Won, the non-paid taxes have been calculated to be over 3 million won.
There is still an agreement to be reached in South Korea regarding crypto taxes.
The regulators have agreed to postpone the highly speculated 20% crypto tax to 2027. Although delayed, several tax agencies in certain regions have been given the authority by South Korean government to seize crypto and other digital assets belonging to people under inspection for tax evasion.
The authorities have promised to give due warnings before taking any affirmative action so as to encourage those under scrutiny to lawfully pay their taxes. Non payment of evaded taxes before deadline will result in the seizing of crypto assets.
Gwacheon City in South Korea is set to launch a crypto seizing system next month to target 361 high-income tax evaders!
With over 18.8 billion won at stake, officials aim for fair taxation by seizing hidden crypto assets. Will this change the game for tax compliance?
— quAInt (@crypto_quAInt) February 4, 2025
With over 18.8 billion won at stake, officials aim for fair taxation by seizing hidden crypto assets. Will this change the game for tax compliance? 
…Gwacheon City Tax Division Chief Kang Min-ah said, “We will realize fair taxation through strong responses to tax avoiders and actively block tax evasion through the seizure of virtual assets.”
Last five years has seen Gwacheon city seize approximately 300 million won worth of digital assets held by high-net-worth individuals who have evaded local tax. The authorities claim they seized over 110 million won of assets in 2024 alone.
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South Korea Is looking To Amend Foreign Exchange Transaction Act In 2025
Criminal transactions associate with digital assets and crypto have been on the rise in South Korea due to a lack of regulatory oversight. Because of the uncertainty and an increase in virtual asset offence, the South Korean government is looking to amend the Foreign Exchange Transaction Act by the first half of the year 2025.
As per Korea Custom Service, virtual asset related crimes comprise of 81.3% of the total recorded KRW 11 trillion (USD 7.97 Billion) worth of illegal foreign exchange activity.
Currently, South Korea is feeling the pressure to incorporate virtual assets into its legal framework before crypto crimes in the country spiral out of control. The Virtual Asset User Protection Act came out in July 2024, requiring VASPs to greater compliance measures to secure investors.
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Postponing Crypto Tax Reforms Have Investors Concerned
The People’s Power party in South Korea had submitted a proposal to delay the enforcement of tax in crypto trading profits. Among growing crypto crimes in the country, investors viewed this measure as a means to attract investment in South Korea as a destination that was attractive but regulated.
The decision to delay comes amid growing investor concerns that taxation could dampen market sentiment. The crypto sector in South Korea has emerged as a favorable investment avenue. Government data shows market capitalization of virtual assets explored to 27% YOY to 55.3 trillion won by June 2024. The daily trading number reaching 20 trillion won.
Compared to crypto, the South Korean stock market has struggled. The margin deposits have fallen nearly 10 trillion to 49.9 trillion won from 59.5 won at the beginning of 2024. The daily trading stocks too lags behind crypto markets at 10 trillion won.
Adding fuel to the fire, a recent cancellation of a proposed income tax with a higher threshold of 50 million won has created a sense of unfairness among young crypto investors in the country.
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The post South Korea To Launch Platform To Seize Digital Assets From Tax Evaders appeared first on 99Bitcoins.