South Korea Uses AI to Uncover $165K in Hidden Crypto
AI Aids South Korea in Crypto Tax Evasion Crackdown
Tax authorities in Jeju City, South Korea, are intensifying their efforts to combat tax evasion by targeting cryptocurrency holdings. An investigation into nearly 3,000 residents with overdue tax bills led to the freezing and seizure of Bitcoin (BTC) and other digital assets from dozens of individuals.
The crackdown follows reports of individuals using crypto to conceal assets, prompting the city to enhance its enforcement measures.
Jeju City's Investigation Details
The investigation focused on residents with outstanding bills exceeding 1 million won (approximately $719). Authorities collaborated with major South Korean exchanges, including Upbit, Bithumb, Coinone, and Korbit, to gather data.
Key findings include:
- Investigators identified 49 residents collectively holding digital assets worth around 230 million won ($165,458).
- Exchanges were designated as third-party debtors, enabling authorities to freeze and seize assets.
- Individuals must settle their debts or face liquidation of their crypto holdings.
AI's Role in Asset Detection
Jeju City utilized AI-powered detection tools to uncover hidden assets more effectively. According to Tax chief Hwang Tae-hoon, this approach will help track down assets, boost tax revenues, and foster a culture of honest tax payment.
Hwang Tae-hoon stated, “We will continue to bolster our response to tax evasion to uncover hidden assets like crypto…We will use AI-based information analysis.”
National Trend of Crypto Tax Enforcement
Jeju's actions reflect a broader national trend in South Korea to crack down on unpaid taxes through cryptocurrency seizures. South Korea has been active in enforcing crypto tax laws since regulators were authorized in 2021 to seize digital assets from delinquent taxpayers.
Similar crackdowns have occurred in cities like Seoul and Paju, resulting in the confiscation of over $180 million worth of crypto between 2021 and 2022.
As South Korean banks increase their crypto and stablecoin initiatives amid evolving regulations, officials remain determined to monitor and regulate the use of digital assets for tax evasion.