Tax authorities in Jeju City, the capital of South Korea’s island province of Jeju, have reportedly begun freezing and seizing cryptocurrency assets from individuals suspected of evading taxes.
The initiative is part of a wider effort targeting 2,962 people with outstanding tax debts totaling 19.7 billion won ($14.2 million), as authorities sought to determine whether they held crypto assets that could be used to offset their liabilities, according to a Saturday report by local media outlet Newsis.
As part of the investigation, officials reviewed records from major South Korean crypto exchanges—including Bithumb, Upbit (operated by Dunamu), Coinone, and Korbit—and identified 49 suspected tax evaders whose combined crypto holdings were valued at more than $166,269.
Jeju City’s Tax Division has instructed the exchanges’ third-party debtors to begin seizing and securing these cryptocurrency assets to help recover part of the unpaid taxes.
Jeju City’s Tax Division employed AI to analyze cryptocurrency transaction data
Jeju, South Korea’s largest island and a popular tourist destination, has a track record of experimenting with crypto initiatives, including the launch of non-fungible token (NFT) tourist cards and a blockchain-based COVID-19 contact tracing app in 2021.
Hwang Tae-hoon, Chief of Jeju City’s Tax Division, told Newsis that the city will “continue to strengthen our response to tax delinquency using new assets such as virtual assets to thoroughly uncover hidden tax sources.”
He added that the division will also persist in “targeting high-value tax delinquents through AI-based data analysis, aiming to secure significant tax revenue and promote a culture of honest tax compliance.”
Crypto adoption in South Korea has grown rapidly, with more than 16 million users—over 30% of the population—entering the market, a surge that followed the boost in crypto interest after former U.S. President Donald Trump’s election victory in November.
Cryptocurrency of suspected tax delinquents targeted for seizure
In 2021, South Korea passed laws granting authorities the power to seize cryptocurrencies, such as Bitcoin, from tax delinquents.
Following this, officials in Paju, a city northeast of Seoul, announced in November last year that they would confiscate and sell the crypto assets of residents with unpaid taxes.
Between 2021 and 2022, the South Korean government seized a total of $180 million in cryptocurrencies from tax evaders.
In the same period, Seoul’s city administration reportedly confiscated $22 million worth of crypto from individuals and company executives suspected of failing to pay taxes.
