According to reports, the body that handles matters relating to “overseas tax evasion” is also investigating the market-leading cryptocurrency exchange.
Summary
• The South Korean National Tax Service (NTS) is conducting a tax-related investigation into Upbit, the leading cryptocurrency exchange in the country.
• The investigation also includes the International Transaction Investigation Bureau of the Seoul Regional Tax Office.
• The investigation focuses on companies involved in overseas transactions and instances of “overseas tax evasion.”
• This is the second significant setback for Upbit, following the completion of an investigation into over 700,000 infractions linked to Know Your Customer (KYC).
• The investigation could lead to Upbit paying millions of dollars in fines.
• Local tax organizations are using blockchain analytics tools and data from cryptocurrency exchanges to monitor residents suspected of evading taxes.
• The government is interested in understanding “crypto flows.”
According to reports, the National Tax Service (NTS) of South Korea has initiated a tax-related investigation into Upbit, which is the most prominent cryptocurrency exchange in the country.
According to reports, the agency is also looking into several other “minor,” undisclosed token issuers on its own.
Upbit Probe Could Link to Foreign Transactions
According to TV Chosun, the investigation also includes the International Transaction Investigation Bureau of the Seoul Regional Tax Office conducting the investigation.
The publication stated that the tax authorities began their investigation on February 20 with “on-site examinations.”
The International Transaction Investigation Bureau’s tax investigations are mostly focused on companies that do business overseas and cases of “overseas tax evasion.”
The examination is the second significant setback that Upbit has experienced this week. Following the completion of an investigation into over 700,000 infractions linked to Know Your Customer (KYC), the Financial Services Commission (FSC), which is the most important financial regulator in the United States, disclosed this week that it is planning to issue “sanctions” against Upbit.
Expecting Heavy Fines?
The investigation into the KYC might end in Upbit having to pay fines that are in the millions of dollars, according to experts.
There is a lack of clarity on the connection between the two probes at this stage. On the other hand, in recent years, local tax organizations throughout the country have increased their efforts to eradicate tax evasion.
Officials have claimed that certain citizens are employing cryptocurrency to “conceal their income” in these local-level investigations.
The same local tax officials have announced that they can now use blockchain analytics tools and data from cryptocurrency exchanges to monitor residents they suspect of trying to hide their cash from tax investigators.
The government is interested in gaining a “better understanding” of “crypto flows.” During the third quarter of the fiscal year 2024, Dunamu, the operator of Upbit, reported operational earnings of 83.9 billion won, which is equivalent to roughly $58.5 million.
Industry sources who did not want to be named told TVChosun that they “anticipate” that “simultaneous tax investigations into Upbit and tiny foundations that issue cryptocurrencies” will give investigators a “better grasp” of “fund flows in the cryptocurrency business.”
According to South Korean legislation, the introduction of all types of cryptoassets is still contrary to the law. Nevertheless, a significant number of businesses have been successful in overcoming this legal obstacle by releasing their currencies through worldwide subsidiaries and associate corporations.
Also Read: South Korea’s Bitcoin Kimchi Premium Has Reached a Three-Year High
South Korea’s Bitcoin Kimchi Premium has reached a three-year peak of 12%, despite a sharp drop in the top BTC to $95,000. This premium is due to the increasing price disparity between local and global markets, with South Korean merchants paying a substantial premium for BTC compared to international counterparts…[Read More]
*Disclaimer*: We at Bitcoinleef.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
Wallets