Tax fraud is one of the biggest crimes one can commit. And if you are in South Korea, then evading crypto tax will result in them seizing your holdings. The threat that South Korea could seize your crypto will be good enough for most individuals to pay their taxes on time. Since this is a nascent market and has huge revenue, it will be something that the government wouldn’t want to miss on.
The growing interest of the government in crypto tax
Yes, the same governments that were not in favor of crypto now want a part of your profits. Just a few days back, the Spanish government made it compulsory for every crypto holder to pay their taxes or face heavy fines. And now, the South Korean government is also doing the same thing. But in the case of South Korea, the reason is quite different. According to the authorities, individuals are hiding money by holding crypto in order to pay less or no taxes. This unreported money is squandering the economy as a lot of black money is accumulating in the country.
This is also the reason why the authorities will work with the exchanges to figure out the transactions and prevent tax evasion. And the exchanges are also complying with the government and providing all the data they need. Two such exchanges are Bithumb and Upbit, one of the most popular exchanges in the country. As of now, the government has identified 511 individuals who are under inquiry and might have evaded tax.
As crypto is becoming more popular, the number of transactions that happen in the same is also increasing. This is why it is very important for the exchanges to keep a very close eye on all transactions and make sure that they are legal. In countries like India, the government has also made it mandatory to share all the data of the crypto holdings with the government. From the deposit of users to holdings and withdrawals made, everything should be reported.
Crypto is getting regulated!
As the entire crypto market has become really big that it’s difficult to stop now. But it is also evident that it will not stay unregulated. With the gigantic volume of transactions and money, governments can get huge amounts of tax from crypto trading. And since the currency is itself unregulated, it is also important that the transactions are monitored for illegal activities. If regulation happens then, we can expect that crypto will not be banned, and the no of frauds and illegal activities in the space will reduce drastically.
What are your thoughts on South Korea threatening to seize crypto on tax evasion? And do you think this will work in favor of the government? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.