Hunting Tax Evaders: Jeju Tax Office Freezes Crypto-assets
The tax office of Jeju Province, South Korea, launched a large-scale operation to freeze and seize cryptocurrency assets from local residents suspected of tax evasion. The measures target individuals with significant tax debts, and data for asset identification was obtained from major centralized exchanges (CEX). This initiative reflects South Korea's increased oversight of the cryptocurrency sector in line with national legislation enacted since 2021, allowing such seizures.
Main details of the operation
The tax office examined data from 2,962 citizens whose total tax liability amounted to 19.7 billion won (around $14.2 million). Transaction analysis on large exchanges like Bithumb, Upbit, Coinone, and Korbit revealed that 49 of these debtors own crypto-assets worth over $166,269. The Jeju City tax office classified these platforms as third-party debtors, enabling direct freezing and seizing of assets to pay off debts.
Advanced AI tools analyzing cryptocurrency transaction records were used to identify hidden funds. Hwang Tae-hoon, head of the Jeju City tax administration, emphasized that the agency intends to strengthen measures against tax violations using virtual assets and AI technology to ensure tax revenue and improve law compliance.
Broader context and consequences
This operation fits into a nationwide trend in South Korea, where authorities seized $180 million in cryptocurrency from tax evaders between 2021 and 2022. Similar actions took place in the cities of Paju and Seoul, with $22 million seized in 2021. Considering that more than 16 million residents (over 30% of the population) are exchange users, market expansion increases regulator attention.
Situation analysis
In the blockchain and cryptocurrency markets, it is noted that this operation underscores the development of a regulatory system in South Korea, where cryptocurrencies are increasingly viewed as a tax object. These measures help reduce tax evasion cases but may lead to decreased liquidity on centralized exchanges if users begin transitioning to decentralized platforms. At the same time, authorities' actions demonstrate blockchain transparency, allowing financial flow tracking without violating core technology principles. Market participants are advised to strictly comply with tax obligations to successfully adapt to tightening regulatory conditions.