Paju Authorities Threaten to Seize Crypto Holdings for Unpaid Taxes
Authorities in Paju, South Korea, have warned residents with unpaid taxes that their cryptocurrency holdings may be seized and sold if debts are not cleared by the end of November. Paju officials are targeting 17 individuals who owe a total of 124 million Korean won (approximately $88,600), according to Yonhap News on November 18.
The city emphasized its commitment to tracking down crypto assets of tax evaders, asserting that digital currencies cannot be used to evade financial obligations. Officials pledged to impose strict penalties on individuals attempting to conceal assets in cryptocurrencies, reflecting a growing trend of using digital currencies to avoid debt collection in South Korea.
Paju has previously confiscated crypto assets for tax recovery; in July, authorities seized assets valued at 100 million won (around $72,000) from tax defaulters. Some residents reportedly convert their funds into cryptocurrencies to evade tax payments despite having the means to settle their debts. By seizing these assets, Paju aims to discourage tax evasion through crypto.
In a separate initiative, South Korea is examining innovative blockchain applications in tax management. NongHyup Bank has partnered with digital asset platform Fireblocks to tokenize value-added tax (VAT) refunds. This project seeks to develop a prototype system utilizing Fireblocks' tokenization engine for real-time tracking of refunds while reducing errors and fraud.
Michael Shaulov, CEO of Fireblocks, stated that tokenizing VAT refunds could lower operational costs and ensure transparency by creating an immutable digital record. This effort is part of broader initiatives in South Korea to incorporate blockchain solutions into public services, enhancing trust between institutions and citizens.
These measures indicate South Korea's leadership in regulating cryptocurrencies and adopting blockchain technology for governance. The developments in Paju underscore the challenge of ensuring compliance while fostering innovation.