What happened?
Cheongju, a city in South Korea’s North Chungcheong Province, revealed it has seized cryptocurrency from 203 residents for failing to pay local taxes since 2021. Additionally, the city has opened a trading account on a domestic crypto exchange, making it one of the first government entities to do so. If further tax bills are unpaid, Cheongju authorities will employ their powers to acquire relevant data from crypto exchanges regarding the tax evaders’ crypto wallets.
Who does this affect?
This policy impacts local residents of Cheongju who have outstanding tax bills and hold cryptocurrency assets. Specifically, 161 individuals who collectively owe the local government approximate 1.5 billion won ($1.1 million) have seen their cryptocurrency seized. Moreover, the indication to liquidate funds may affect crypto market participants, especially within the affected region.
Why does this matter?
This move by the Cheongju local government signifies a trending crackdown on tax evasion via digital currencies in South Korea. It further showcases the government’s willingness to engage with cryptocurrency markets to rectify fiscal discrepancies. This matter is significant as the actions taken by this city could potentially influence other governing bodies to adopt similar approaches, thereby affecting the global crypto market dynamics and shaping future regulations around cryptocurrencies.