Bithumb Crypto Exchange Receives Massive Tax Bill
Following a tax investigation into Bithumb, the crypto exchange comes clear of charges but receives massive tax bill
The National Tax Service (NTS) in South Korea launched a thorough investigation into Bithumb crypto exchange as part of cracking down on illegal activities in crypto exchanges in the country. But the company has come out clear of all charges. But, according to eToday local news, as one of the largest crypto exchanges in trade volume in South Korea, Bithumb has been charged with a bill for back taxes which amount to 30 billion Won (nearly 28 million USD).
An official involved in the tax investigations made the following statement;
The [National Tax Service] has conducted a tax investigation against Bithumb for the 2014 to 2017 business years. I know that Bithumb has decided to pay the related taxes without any objection to the imposed tax amount.
The official also stated that, “No charge of tax evasion was found, so prosecution charges against tax portal were not carried out.”
However, there is still no formal notice related to the final payment due on tax liability given to Bithumb crypto exchange.
Initial Tax Investigations on Bithumb Crypto Exchange
The Bithumb crypto exchange got targeted for investigations for tax evasion following 171-times increase in profits over a 12-month period. On 10th January 2018, investigations began by several government authorities such as the National Tax Service (NTS), Korea Financial Intelligence Unit (KFIU) and Financial Services Commission (FSC). The National Tax Service, wanted to make sure that all taxes were paid and their holding, profits and losses were properly disclosed.
Strict Rules on Crypto Exchanges in South Korea
The government authorities in South Korea have persuaded actions to make regulations tighter for digital currency exchanges in the country since the latter part of 2017. One such action was the decision to ban initial coin offerings (ICOs) in September last year.
Later in January 2018, the country prohibited the use of anonymous cryptocurrency trading accounts. There are several ongoing investigations within crypto exchanges to find embezzlement and fraud activities. According to the information received from a local police department, Coinone crypto exchange executives engaged in crypto margin trading service will be charged for illegal gambling.
Even though some thought there could be a ban on crypto exchange trading following the events, it was not the case. And it seems the government will allow domestic initial coin offerings in South Korea in accordance with well-specified strict rules.