Jeju City Tax Officials Begin Seizing Crypto from Alleged Tax Evaders

Authorities in Jeju City, the capital of South Korea’s island province of Jeju, have begun freezing and seizing cryptocurrency from individuals accused of evading taxes. The move is part of a broader crackdown aimed at recovering unpaid tax revenue through new asset classes such as digital currencies.

According to a recent report from local outlet Newsis, Jeju tax officials investigated 2,962 individuals who together owed 19.7 billion won ($14.2 million) in unpaid taxes. The investigation involved scrutinizing data from the country’s four largest exchanges—Bithumb, Upbit, Coinone, and Korbit—to determine if the alleged tax dodgers held crypto that could be seized.

Jeju Investigates into Nearly 3,000 Tax Delinquents

The probe revealed that 49 individuals possessed a combined $166,269 worth of digital assets. As a result, Jeju City’s Tax Division has designated the exchanges as third-party debtors, paving the way for coins to be frozen and liquidated to cover some of the outstanding balances.

Hwang Tae-hoon, chief of the Jeju Tax Division, said the city intends to intensify its pursuit of hidden tax sources by targeting emerging asset classes like cryptocurrencies. He added that the division will also use AI-driven information analysis to track down high-value delinquents, with the goal of ensuring greater compliance and building a stronger culture of honest tax payment.

Jeju, South Korea’s largest island and a major tourist destination, is no stranger to blockchain-based initiatives. In 2021, it introduced NFT tourist cards and a blockchain-powered COVID-19 contact tracing system. 

South Korea Cracks Down on Crypto Tax Evasion

Jeju’s measures are not an isolated effort. South Korea has strengthened its approach to crypto taxation since 2021, when laws were introduced allowing regulators to seize cryptocurrencies from individuals failing to meet their tax obligations.

Other cities have followed similar paths. In November 2023, authorities in Paju, northeast of Seoul, announced plans to confiscate and sell the digital assets of residents with overdue taxes. 

Between 2021 and 2022, the South Korean government seized a total of $180 million worth of cryptocurrencies from tax evaders, while in 2021 alone, Seoul’s city administration confiscated $22 million in digital assets from individuals and business leaders accused of delinquency.

Today, with more than 16 million South Koreans—over 30% of the population—registered on crypto exchanges, the city is extending its digital asset experiments into tax enforcement.