Reports indicate that South Korea’s National Tax Service (NTS) has launched a tax probe into Upbit, the nation’s foremost cryptocurrency exchange. This investigation reportedly also targets several lesser-known token issuers.
As per TV Chosun, the inquiry involves the Seoul Regional Tax Office’s International Transaction Investigation Bureau, which specializes in tax matters connected to overseas transactions and possible tax evasion.
The NTS commenced its investigation on February 20th, carrying out on-site audits to collect information.
This investigation presents a second notable hurdle for Upbit this week, following the Financial Services Commission (FSC) announcing intentions to administer penalties after an assessment revealed around 700,000 Know Your Customer (KYC) infractions.
Analysts predict that the KYC scrutiny could result in Upbit facing fines that amount to millions of dollars. While it’s uncertain whether the two investigations are linked, local tax authorities have stepped up their initiatives to target tax evasion, asserting that some individuals utilize cryptocurrency to hide their earnings.
Employing blockchain analytics tools and data from crypto exchanges, tax officials are reportedly surveilling citizens suspected of trying to obscure their assets from tax oversight.
Dunamu, the entity behind Upbit, disclosed operating profits of 83.9 billion won (around $58.5 million) in Q3 of FY2024. Industry experts believe that these concurrent inquiries into Upbit and smaller cryptocurrency entities will provide a more thorough insight into financial movements within the crypto industry.
Despite all types of cryptocurrency issuance being prohibited under South Korean legislation, numerous firms have evaded these restrictions by launching their tokens through overseas subsidiaries and joint ventures.