Bithumb and Coinone, two of South Korea’s leading cryptocurrency exchanges by volume, are reportedly the subjects of a tax investigation being conducted by the country’s National Tax Service (NTS). Details as to the nature of the investigation are not immediately available.
The tax-collecting body is a subsidiary of the Ministry of Strategy and Finance, which has stated that corporate taxes may apply to virtual currency exchanges. A measure that would subject digital asset holdings to capital gains taxation may be under consideration as well.
A source with Bithumb told the Yonhap News Agency that on January 10, one or more representatives of the NTS conducted a field survey of its headquarters in Gangnam-gu, Seoul, and collected data on its cryptocurrency transactions. According to news outlet The Hankyoreh, investigations at Coinone’s headquarters that same day were limited to verbal questioning.
Also on Wednesday, the Seoul Regional Tax Office sent investigators to Bithumb’s head office in order to gather information pertaining to sales conducted on the platform. South Korea’s governmental structure allows for the collection of both local and national taxes.
In late December, both of the exchanges targeted in the current investigations received visits from the Fair Trade Commission, which was attempting to ascertain whether they and eleven other cryptocurrency marketplaces had violated consumer laws.
On December 12, the Korea Communications Commission fined Bithumb’s parent company for failing to “comply with protective steps, making it vulnerable to hacks and causing leaks of personal data and financial damage.”
Since many of the country’s citizens have caught the cryptocurrency trading fever, the government has been generally skittish about the phenomenon, and several Korean companies have concurrently scaled back their digital asset-related activities.