South Korea’s Tax Agency Exposes $98.5 Billion in Overseas Crypto Holdings
On September 20th, South Korea's National Tax Service (NTS) revealed that it had received disclosures regarding foreign cryptocurrency assets from 1,432 individuals and businesses, totaling 130.8 trillion won (approximately $98.5 billion).
These holdings accounted for 70.2% of reported foreign assets, with many individuals also disclosing foreign deposits and savings accounts. South Korea mandates citizens to report foreign assets exceeding 500 million won.
The NTS actively monitors non-compliance and employs cross-border information exchange data, foreign exchange data, and agency notices for enforcement, imposing fines on those violating tax rules.
South Korea’s evolving cryptocurrency policy stems from growing concerns about money laundering.
The country passed the Virtual Asset User Protection Act in June and imposed cryptocurrency disclosure requirements on lawmakers and companies, set to take effect next year.
In August, guidelines mandated cryptocurrency exchanges to allocate $2.3 million or 30% of daily average deposits as reserves.
These stringent measures might seem puzzling, but they are a response to recent cryptocurrency-related events. South Korea’s cryptocurrency industry took a hit when Terraform Labs collapsed in May 2022, leading to an extended crypto market downturn.
Additionally, a murder in Seoul in May 2023 was reportedly linked to a failed crypto investment. These incidents have shaken South Korea’s crypto industry and influenced its strict regulatory approach.