According to Cointelegraph, authorities in Paju, a city in South Korea's Gyeonggi Province, have announced plans to confiscate and sell cryptocurrency holdings from residents with outstanding tax debts. On November 18, local media reported that Paju city officials issued notices to 17 individuals who collectively owe 124 million Korean won, approximately $88,600. These taxpayers have been warned that their digital assets held on exchanges will be seized and liquidated if their debts are not cleared by the end of November.
Paju city officials are determined to track down the crypto assets of debtors and enforce penalties on those attempting to evade taxes. The authorities emphasized that this initiative aims to convey a strong message that cryptocurrencies cannot be used to conceal assets from tax obligations. The report highlighted that digital currencies have become a favored method for avoiding debt collection in South Korea. This is not the first instance of such actions in Paju; on July 29, officials seized 100 million won (around $72,000) in crypto assets from tax delinquents. The decision to target crypto assets arises from the observation that some citizens are deliberately converting their funds into digital currencies to evade tax payments, despite having the financial means to settle their dues.
In a related development, a South Korean bank is exploring the tokenization of value-added tax (VAT) refunds. On November 13, NongHyup Bank entered into a Memorandum of Understanding with digital assets platform Fireblocks to develop a prototype for tokenized tax refunds. Fireblocks announced that the bank will utilize its tokenization engine in a pilot project aimed at refunding goods and services tax and VAT on retail purchases. Michael Shaulov, co-founder and CEO of Fireblocks, explained that tokenization allows for the assignment of unique digital identifiers to assets, enabling real-time tracking from issuance to settlement. This process minimizes the risk of manual errors or fraud, reduces operational costs, and provides an immutable record to enhance trust between clients and banks.
