Jeju City Targets Crypto Holdings of Alleged Tax Dodgers

South Korea’s Jeju City authorities have launched an aggressive campaign against tax evaders. The authorities are seizing and freezing the crypto assets of people who are alleged tax dodgers. According to Newsis, a local media outlet, the tax officials investigated 2,962 individuals that had debts amounting to 19.7 billion won ($14.2 million).

The investigation revealed that 49 of the alleged tax dodgers collectively held cryptocurrencies worth more than $166,000 across major South Korean exchanges, including Bithumb, Upbit, Coinone, and Korbit.

Jeju City Holds Crypto Assets of Tax Evaders

To recover unpaid taxes, Jeju’s Tax Division designated these exchanges as third-party debtors, authorizing them to freeze and secure the identified assets. The move allows the city to directly seize crypto from the accounts and use it to settle tax arrears.

In a statement, Jeju City Tax Division Chief Hwang Tae-hoon emphasized the city’s adoption of advanced technologies in tracking digital assets. “We will continue to strengthen our response to tax delinquency using new assets such as virtual assets to thoroughly uncover hidden tax sources,” he said.

Hwang added that the city plans to expand the use of AI-driven information analysis to identify and collect from high-value tax evaders, securing “substantial tax revenue” while promoting a culture of compliance and honest payment.

Jeju, already known for its blockchain initiative, including NFT-based tourist cards and a COVID-19 contact tracing system, has positioned itself as a leader in digital innovation.

In 2021, South Korea made it permissible for tax authorities to seize cryptocurrencies from anyone who don't pay their taxes. This gave regulators across the country the power to go for digital wallets. Since then, tax collectors all throughout the country have been using crypto more and more to get back money they are owed.

In the same year, officials in Seoul took $22 million worth of cryptocurrency from people and company executives who hadn't paid their taxes. From 2021 to 2022, South Korean officials took a total of $180 million in crypto from those who were trying to avoid paying taxes. In November 2024, the city of Paju announced similar steps.

The crackdown occurs as South Korea's acceptance of cryptocurrencies continues to grow. More than 16 million people, or more than 30% of the population, are said to trade digital assets. This number has grown since people are more optimistic about the market after Donald Trump won the election in November.

The most recent steps by Jeju City show that they are serious about stopping tax evasion and that South Korean authorities are becoming more open to using crypto assets as a way to enforce the law. As more people use digital assets, seizures like this are likely to happen more often. This marks the start of a new era in which digital assets are no longer safe from taxes.