South Korea clamps down illegal crypto activities

South Korea has launched a crackdown against crypto activities after the Financial Supervisory Service, the country’s financial watchdog, and the Finance Ministry joined forces to curb illicit financial transactions.

The Office for Government Policy Coordination acknowledged that this move is intended to reduce money laundering and fraud that are linked to cryptocurrencies.

It is not clear what specifically triggered the crackdown, but the inter-agency initiative is most likely brought about by illegal activities and speculative investments in the now booming crypto market. Koo Yun-Cheol, head of the OGPC, noted that there is a need to pay attention to the occurrence of illegal activities using virtual assets.

Curbing tax evasion

The Financial Supervisory Service is also planning on closely monitoring the alleged illegal transfer of virtual assets abroad. The state tax agency will focus on these supposed tax dodgers that are stashing away assets in cryptocurrencies.

Just this February, the South Korean Ministry of Economy and Finance announced that investors that make at least 2.5 million won (approximately US$2,260) from crypto trading will be subjected to a 20% tax starting 2022.

In hopes of combating tax evasion, the country took some initiatives.

A burning issue in South Korea

Cryptocurrency taxation has been a very hot issue in South Korea since a crypto taxation bill was brought up in the nation’s parliament last year.

Last December, the National Assembly permitted an annual tax revision that paved the way for the 20% tax that will be imposed on traders in the crypto space.

At the same time, Bank of Korea Governor Lee Ju-Yeol has cautioned the citizens of the country against excessive digital assets investments basing on their high price swings. According to the bank official, this can be a potential threat to the nation’s financial stability.

 

Image courtesy of Cointelegraph News/YouTube

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