South Korea Investigates Crypto Exchange Bithumb for Tax Evasion

• South Korean tax authorities are investigating local crypto exchange operator Bithumb Holdings.
• A local report states that the investigation will be conducted by a unit dedicated to “special tax investigations.”
• Bithumb has been at the center of similar investigations before, with authorities collecting 80 billion won in income tax in 2018.

South Korean tax authorities are currently undertaking an investigation into local crypto exchange operator Bithumb Holdings. According to a Tuesday report by Yonhap News, the National Tax Service is investigating possible tax evasion via domestic and international transactions of Bithumb Korea, Bithumb Holdings, and affiliates in Gangnam-gu, Seoul.

A company official confirmed the news to CoinDesk Korea but was unable to provide any further details. The investigation is being conducted by a unit dedicated to “special tax investigations”, and this is not the first time Bithumb has been the subject of such an inquiry. In 2018, the National Tax Service conducted a special tax investigation on Bithumb Korea, which resulted in the collection of 80 billion won in income tax. However, it was later determined that Bithumb was not guilty of any tax evasion.

It is reported that authorities have questioned businessman Kang Dong-won, who was the largest shareholder of Bithumb Holdings, over the alleged tax evasion. It is believed that the tax authorities are seeking to establish whether Bithumb has been filing accurate tax payments on its domestic and international activities.

The South Korean government has been tightening its regulations on cryptocurrencies in recent years, and has been encouraging exchanges to comply with anti-money laundering (AML) and other regulations. It is believed that the latest investigation is intended to ensure that local crypto exchange operators are adhering to these regulations.

The tax authorities have yet to comment on the investigation, but it is likely that the outcome of the investigation will have a significant impact on the crypto industry in South Korea. This could potentially lead to more stringent regulations and enforcement of existing regulations, which could have a major impact on the industry.