South Korean City Seizes and Sells Crypto for Unpaid Taxes

• Paju City in South Korea will sell cryptocurrencies seized from local tax defaulters.
• The seized assets, valued at around ₩50 million ($37,000), will be liquidated if taxes remain unpaid by the end of November.
• This marks the first time a South Korean local government has directly liquidated cryptocurrency holdings for tax enforcement.

Paju City, in South Korea’s Gyeonggi Province, has announced its first-ever plan to sell cryptocurrencies held by local tax defaulters. This marks a significant step for local governments nationwide, highlighting the increased focus on using crypto assets to ensure tax compliance.

₩124M in Unpaid Crypto Taxes at Risk

City officials revealed that 17 individuals with unpaid taxes totaling 124 million won (approximately $92,000) have been notified about the seizure of their cryptocurrency holdings. The seized assets, valued at around 50 million won (approximately $37,000), will be transferred to the city’s account and sold if the outstanding taxes are not paid by the end of November.

This announcement highlights growing concerns about using cryptocurrencies to conceal or transfer wealth. Authorities recognize that digital assets have gained popularity not only as investments but also as tools for financial evasion.

Paju City’s action sends a clear message to taxpayers that crypto assets are not a shield for avoiding financial obligations. “Taxpayers cannot hide their assets,” city officials affirmed, emphasizing their commitment to tracking and penalizing defaulters.

A New Precedent for South Korea

While South Korean authorities have previously seized virtual assets from delinquent taxpayers, this is the first instance of a local government directly liquidating these assets. The move could set a precedent for other municipalities to follow, further integrating cryptocurrencies into mainstream enforcement mechanisms.

Paju City’s decision aligns with a global trend of governments increasing scrutiny of digital assets as cryptocurrencies become integral to financial ecosystems. For instance, Russia recently proposed a 15% tax on income from cryptocurrency trading and mining to regulate the growing sector and boost tax revenue. Crypto is now classified as “property” for tax purposes, with mining income taxed based on market value.

In September, Ohio State Senator Niraj Antani introduced a bill allowing Bitcoin payments for local taxes and fees. The bill aims to make crypto assets, like Bitcoin, a valid payment method for Ohio and its local governments. Antani emphasized embracing cryptocurrency to promote innovation and free enterprise, calling it a key part of the modern economy.