Government plans to confiscate crypto holdings

The South Korean government is warning that they might take away citizens' crypto assets if they keep dodging taxes. They believe this will send a clear message that people can’t just stash their money in crypto to escape tax obligations. This isn’t just talk either, since they’ve actually done it before. Do you guys think this is a good strategy to make people pay up? Personally, I think they should come up with better solutions to tackle tax evasion instead of just snatching away crypto like it’s candy from a kid. If people keep hiding their money in crypto, it could lead to all exchanges in South Korea being forced to implement KYC and report back to the government.

@OP - Did you even read the article? It is NOT the 'South Korean Government' - it is ONE city doing it. Huge difference. Frankly, given the tax authorities in the city already know who owes what, there is no difference between seizing crypto assets or fiat/property assets to settle their tax bills. Frankly, I see nothing wrong with it.

It is the City of Paju and not the South Korean government, and they have already sent this notice to 17 tax evaders. I am pro BTC, but tax evasion is a crime and BTC or crypto should not be used as a tool to evade tax, i don't know how high taxes are in South Korea, but if citizens think the taxes are too high, they can consider relocating, rather than committing a crime by purposely not paying taxes.

When it comes to taxes, I have to be the devil's advocate, paying taxes is important for the government and using crypto to evade taxes only makes crypto appear bad in the eyes of the government, so crypto users should not do this. However, like Fuzzy mentioned, the topic is about a single city at this point. If governments decide to KYC every users on exchanges running there which is pretty scary but possible, they will have full overview of our holding in transit, therefore applying taxation on every citizen. I think taxation system of crypto are a relatively upcoming thing and is needed to make sure prosecution of tax debtors is avoided.

That's right! Crypto should never be used as a tool to evade tax and get involved in criminal wrongdoing. Crypto has generated enough bad reputation due to its involvement with the incorrect incident already and I am sure we don't need more such incidents to happen. Even through just one city is doing it, the other cities can follow the same. Eventually it can be adopted by the country itself. The possibilities are endless.

So many people have the wrong perception of crypto, and with what the mainstream media publishes about it, you cannot really blame them. Crypto is just a tool like i would always say and people are always going to use it differently, i.e. we all know why BTC was created, but that would not stop bad actors from using it for their nefarious purpose, neither does it make BTC the problem.

KYC procedure will soon be almost all centralised exchanges. Of course, the market will always demand crypto exchanges without KYC, but there will be other risks with the exchange closing down at any moment. And since cryptocurrency has already acquired legal status in many countries, the government has the right to confiscate it like any other property or money by decision of tax authorities and courts.

Now people should realize why their privacy is important. It is not as easy as we think though. The Koreans can’t simply say “I don’t have any bitcoins. I didn’t declare my holdings so I don’t have the pay taxes.” It doesn’t work that way. If they bought their crypto from an exchange, the gov will suspect that they possibly hold crypto. To avoid these hassles, we need to buy crypto anonymously and spend anonymously. Never ever touch any centralized crypto dealers that ask for KYC. Then, the gov will never have a proof of your crypto holdings.

Yeah true, no-kyc centralized exchanges tend to make kyc mandatory after sometime and even the ones that still offer no-kyc services can request kyc from any customer at anytime. So even people who use such exchanges should be ready to provide kyc if the need arises, or risk losing their deposit.

If they enjoy basic amenities and other social services from the government, why would they invade tax? The government needs money to provide these services, so citizens should not use crypto to avoid tax. The government should engage in enlightenment programs to educate people about the importance of paying taxes. After that sanctions should be placed on any citizen that is avoiding tax.

Well, people just want all favours from the government but when it comes to paying taxes in return, they will try to avoid, hide or think of excuses of not paying it. Anyway i know we are talking about this news related to City of Paju, but my general question is that the government can only tax you if you are using that country's exchange as that data can be made available to the government. Anyone doing trading on Binance or any other international exchange the government can't track them and therefore can't tax them, right?

This is only a local government official who will try to do this?  This will be headshaking hehehehe. I want to teach our Korean community members on how to buy Monero and which exchanges to use to hide their transactions from their government. I am not quite certain what is the situation of corruption in South Korea, however, in 3rd world countries if you can avoid paying taxes then you should do this. The tax usage efficiency in the 3rd world sometimes is very much low to 20%. Yes, only 20% is used for where it should he spent and 80% goes to corrupt government officials heheheheh.

South Korea is really angry this time with crypto exchanges and users, I have no doubt about the South Korean government's policy on taxation, legally they really do it, it's not a threat, action will be taken if crypto users or exchanges continue to avoid ittaxes that have been determined by law. They know currently crypto has a high income in taxation, so I don't think it's a threat, but an action that South Korea will take, For that reason, I think crypto users and exchanges in South Korea must think wisely about decisions regarding taxation that will be applied to crypto users, for their security from confiscation by the tax authorities.

I do agree with you! Being a crypto user myself, I do understand that crypto is a tool and bad actors will always be there. But a large number of population will still believe what media is showing to them. While you and I are on the same page, the percention can be very different for different people. Bitcoin is never a problem, the bad actors are the problem. I understand but not many would have the same understanding.

So you are saying that those who are not paying taxes on cryptocurrencies are bad actors? While I agree to this too but in many countries the legal definition of bitcoin and crypto is not defined.  Why many people do not pay taxes on crypto is that there have been no defined rules and regulations about it. Think about that a lot of people not paying taxes on crypto and not been taken action against them. So when these bad actors are not being punished, the good actors (paying taxes on Bitcoin) feel bad that if the non-tax payers aren't getting punished, why we should pay tax

This would be headshaking if they will try to create very strict policies and impose high taxes on the cryptospace. They will become very much behind on cryptospace development and innovation because this would discourage developers because the South Korean market for projects will be bad. I predict that what will certainly be more headshaking is it will be China that will be less strict and impose less tax on the cryptospace beginning 2025 heheheh.

Technically this is same to other country, anyone who trying to hide to not pay tax broke the laws. There are only two choice, hide and get caught or hide and never get caught. There's always a chance in anything, the centralized exchanges have your logs and when the government found your coins were come from x exchange, they can demand it. The lowest chance to get caught is if you trade via peer to peer without any central party, only both receiver and giver knows that.

I won't blame any country or region who come up with such threat of seizing hodlers coins for violating their tax regime or evasion of tax payment. To evade tax payment is a crime that has different kinds of punishment and if to seize crypto would be the solution then there shouldn't be any fuss about that. There has been call for regulation even though it is not the spirit of bitcoin but if governments have made crypto to have legal status then we should also expect that the government would source for funds through it and that is by taxing users. Funds gotten from tax is used to run and build the country's infrastructure and so it is a crime to evade tax. And I think the next stage will be the closure of exchanges who do not comply in getting the identification of users in their exchange for monitoring.

This quote is from the article. Commenting now from a month after and I am wondering if the Authorities has made goof on their plans. I support them because as a resident you are subject to the laws of the land and since you are enjoying the basic amenities, you are suppose to pay your taxes which is what guarantees continued sustenance of such. Tax evasion is a crime punishable by law and you either pay your taxes or leave the city to another one where they don't mind if you pay or not but those options are limited.

I predict the the privacy technics and tactics that we the small minnows can perform in the cryptospace will be used as another type of rebellion against the government. If can have the perfect tactics to escape us from paying these taxes that only go to the government official's pockets, I can very much certain that more than 50% of the people in the cryptospace will use this. Why would you pay taxes if this money will go to where it is supposed to go? Why would you give these government officials the power by taking money from you to pay for maintenance of their machinery. We the small minnows need to get this power back and this begins by hiding wealth in cryptocoins and cryptotokens.