South Koreans declare overseas crypto holdings worth $98.5 bln
- Crypto held overseas constituted 70.2% of the total value of foreign assets declared by South Korean nationals.
- The tax agency warned that individuals who break tax rules will face fines.
South Korea’s tax agency, the National Tax Service (NTS), informed on 20 September that it has received declarations about overseas crypto assets from a total of 1,432 individuals and companies. The worth of these crypto assets held overseas by these taxpayers is 130.8 trillion won ($98.5 billion).
The crypto holdings held overseas constituted 70.2% of the total value of reported foreign assets. A significant number also reported deposits and savings accounts.
South Korea requires its citizens to report their foreign holdings if they possess more than 500 million won in assets, including crypto.
The tax regulator intends to closely scrutinize people who fail to report financial accounts held abroad. It stated that the tax authority has been collating cross-border information exchange data, foreign exchange data, and related agency notice data. It warned that individuals who break tax rules will face fines.
What’s driving South Korea’s crypto policy?
A few days ago, AMBCrypto reported that South Korea was shifting its focus to over-the-counter (OTC) crypto trades as concerns over money laundering grow.
In June, the country passed the Virtual Asset User Protection Act. It passed a law in May that requires lawmakers to disclose their crypto holdings. In July, it implemented a similar rule but for companies. All the companies would need to disclose their crypto holdings beginning next year.
In August, the country passed guidelines that directed crypto exchanges to allocate at least $2.3 million or an equivalent of 30% of their daily average deposits as reserves.
Such strict measures might make you wonder why the East Asian nation is taking such measures around cryptocurrency.
But we must remember that South Korea was home to Terraform Labs that collapsed in May 2022 that led to a long crypto winter.
A murder even took place in Seoul in May 2023, reportedly due to a failed crypto investment.
These crypto scandals shook the crypto industry in South Korea and the world. It is in the light of these instances that we should analyse the stringent actions of South Korean authorities.