Authorities in Paju, South Korea, have announced plans to seize and sell cryptocurrency assets from taxpayers with outstanding debts.
Introduction
On November 18, South Korean media outlet Yonhap reported that Paju city officials had sent notices to 17 citizens with unpaid taxes totaling 124 million Korean won (approximately $88,600). Taxpayers were warned that their crypto assets might be confiscated and sold if debts are not settled by the end of November.
Tracking and Seizing Crypto Assets
Paju officials emphasize their commitment to pursuing tax defaulters by tracking their digital assets. This is not the first instance of tax authorities in Paju seizing cryptocurrencies owned by debtors. On July 29, 100 million won (around $72,000) in crypto assets were confiscated. Officials explained that citizens intentionally convert funds into digital assets to evade tax payments.
VAT Tokenization in South Korea
Meanwhile, a South Korean bank explores the possibility of tokenizing value-added tax (VAT) refunds. On November 13, NongHyup Bank signed a Memorandum of Understanding with digital assets platform Fireblocks, aiming to launch a prototype for tokenized VAT refunds. Tokenization allows unique digital identifiers to be assigned to assets and tracked in real-time, reducing error and fraud risks.
The actions by Paju authorities and South Korean banks highlight the growing importance and integration of cryptocurrencies in the financial system, prompting measures to ensure fair taxation and transaction security.
