The Gwacheon City in South Korea will roll out a virtual asset electronic seizure system next month to track and confiscate crypto from tax evaders.
The system will enable authorities to identify hidden assets and enforce tax collection, with full-scale seizures set to begin in the first half of the year, according to a translated local media report.
The city has identified 361 individuals who owe more than $2,060 (3 million won) in local taxes, with total arrears reaching about $12.9 million (18.8 billion won).
Officials plan to track these tax evaders by comparing their records with data from major domestic crypto exchanges.
While the South Korean government has postponed a planned 20% crypto tax until 2027, local agencies have been given the power to seize digital assets from tax evaders.
Gwacheon officials say their new electronic seizure system is crucial for closing tax loopholes and ensuring fairness.
“This measure is a decision to establish tax justice so that citizens who faithfully pay their taxes are not disadvantaged,” Gwacheon City Tax Division Chief Kang Min-ah told the local media outlet.
Gwacheon will reportedly issue advance warnings to encourage voluntary payment and avoid unnecessary disputes, before seizing any assets.
If residents fail to settle their dues within the deadline, authorities will proceed with crypto seizures and collection.
The city has already seized $206,000 (300 million won) worth of crypto from tax evaders over the past five years, recovering $75,500 (110 million won) in unpaid taxes in 2024 alone.
Officials expect the new system to significantly improve enforcement.
“This is a strong response to tax delinquents,” Kang noted, adding how authorities will “actively block tax evasion through the seizure of virtual assets.
While South Korea tightens its grip on tax evasion, India is taking an even tougher stance on crypto taxation.
The 2025 Union Budget proposed new amendments allowing tax authorities to audit undisclosed crypto gains from the past 48 months, with offenders facing a 70% penalty on unpaid taxes.
The 30% tax on crypto earnings and the 1% TDS on transactions remain unchanged, offering no relief to traders.
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