South Koreans' Crypto Assets Total Almost $100 Billion, Accounting for 70% of Nation's Overseas Holdings

South Koreans’ Crypto Assets Total Almost $100 Billion, Accounting for 70% of Nation’s Overseas Holdings

Updated: 20 September 2023

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South Koreans reported overseas crypto assets worth 130.8 trillion won ($98.7 billion) that account for 70% of the nation’s total overseas assets, the nation’s tax agency said.

The crypto holdings were held by 1,432 individuals and corporations, indicating an average of $68.4 million in crypto holdings per entity, said the National Tax Service (NTS), according to a report by Yonhap News Agency.

In contrast, deposits and savings accounts accounted for just 22.9 trillion won or $17 billion of the total and were reported by 2,952 people and businesses. In terms of countries, most South Korean companies held overseas accounts in the United States followed by Japan and Britain. Similarly, most individuals also held accounts in the U.S. followed by Singapore and Hong Kong.

An additional 1,590 organizations disclosed owning shares worth 23.4 trillion won, that is $17.3 billion.

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Tax Authorities Crack Down On Undisclosed Crypto Assets

Despite its friendliness to the crypto industry, the country has been taking great steps in taxing crypto holders, especially since discovering that most people use crypto to hide their property and evade taxes.

In August, the South Korean city of Cheongju restated its intentions to begin seizing cryptocurrencies from local tax evaders. As such, the city’s administrators requested seven South Korean crypto exchanges to inquire into the holdings of thousands of tax evaders, according to CoinTelegraph.

Following the results of the inquiries, the city plans to confiscate cryptocurrencies from the tax evaders. This has become a common practice in South Korea over recent years as authorities learn of more evaders.

In 2021 and 2022, the South Korean government seized cryptocurrency from tax evaders valued up to a total of 260 billion Korean won, $180 million. The Seoul municipal government in South Korea’s capital also confiscated cryptocurrency from individuals and business executives in 2021, totaling 25 billion won, $22 million.

The NTS also said that it intends to closely monitor people who fail to disclose their foreign bank accounts and holdings. The authority also revealed that it has been gathering cross-border information exchange data, foreign exchange data, and related agency notification data, and that it will impose fines on individuals who violate the rules.

“In order to respond to the risk of potential tax base erosion through virtual assets, tax authorities around the world, including the National Tax Service, are preparing to exchange information in accordance with the Information Exchange Reporting Regulations,” NTS said.

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