Gushiken Yona
South Korea is cracking down on crypto, giving exchanges the power to freeze transactions and seizing digital assets for unpaid taxes.
South Korea Empowers Crypto Exchanges
A new clause added to South Korea’s Virtual Asset User Protection Act has granted cryptocurrency exchanges unprecedented power to immediately block deposits and withdrawals. This change, driven by concerns over hacking, money laundering, and fraud, allows exchanges to act swiftly in urgent situations, freezing funds without prior notice to users.
According to SBS Biz, the Financial Supervisory Service (FSS) approved this industry request, acknowledging the need for rapid intervention in certain circumstances. However, the FSS also emphasized that providing advance notice should remain the standard practice, urging exchanges to carefully consider the specific nature and urgency of each situation before implementing a freeze without prior notification.
This new authority extends beyond simply monitoring activity; exchanges can now actively intervene, freezing funds and preventing transfers if they suspect illegal activity or violations of terms of service.
Crypto Seizure for Unpaid Taxes
Simultaneously, the city of Paju has taken aggressive action to collect unpaid taxes, seizing cryptocurrency assets from delinquent taxpayers. This move underscores South Korea’s commitment to integrating the cryptocurrency market into the existing tax system.
City officials stated, “We have sent virtual asset transfer and sale notices to 17 people who have so far notified them of their unpaid local taxes, totaling 124 million won… If they do not pay their unpaid taxes by the end of this month, we plan to transfer the virtual assets they own, totaling 50 million won, to the city’s account and sell them.”
This action sets a precedent that other jurisdictions within South Korea. It demonstrates that cryptocurrencies, despite their decentralized nature and perceived anonymity, are not exempt from government oversight and taxation.
South Korea has long been a hub for cryptocurrency activity, both in terms of adoption and regulation. These latest developments reflect the country’s ongoing efforts to strike a balance between fostering innovation and mitigating the risks associated with digital assets.
The interplay between these two imperatives will continue to shape the future of the crypto market in South Korea and potentially influence regulatory approaches globally. The long-term consequences of these new measures, both positive and negative, remain to be seen.
However, one thing is clear: South Korea is determined to assert its authority over the cryptocurrency market within its borders. The effectiveness and fairness of these new regulations will be closely scrutinized by investors, industry participants, and regulators worldwide.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
