Local authorities in Jeju City, South Korea, have launched a sizeable operation to combat delinquent tax payment by identifying cryptocurrency custodians of individuals who owe back taxes.
According to Newsis, tax authorities focused on 2,962 individuals collectively owing 19.7 billion won, around 14.2 million USD.
The tax division performed due diligence to find individuals by investigating their accounts with domestic exchanges Bithumb, Upbit, Coinone, and Korbit.
The tax authorities confirmed 49 individuals held various cryptocurrencies worth more than 200 million KRW, around $144,379, which have subsequently been frozen for seizure.
Exchanges Named as Third-Party Debtors to Enforce Collection
The Tax Division of Jeju City has officially designated the four exchanges as third-party debtors. It is permitted to legally secure the property and transfer it to pay off debts.
This process represents one of South Korea’s more assertive measures to make digital assets part of its tax enforcement mechanism.
By freezing and seizing the holdings in question, Jeju officials are sending a strong signal to those trying to hide their assets in crypto to avoid paying their taxes.
This action is consistent with broader national measures passed in 2021 that allow regulators to seize a taxpayer’s cryptocurrencies, such as Bitcoin.
Also Read: South Korean Lawmakers Demand Probe into $29.7 Bln “KOK” Crypto Fraud
AI-Driven Tax Enforcement Expands Reach
Jeju’s process includes a strong emphasis on the utilization of artificial intelligence for both blockchain and exchange data analysis for unknown tax sources.
Tax Division Chief Hwang Tae-hoon stated that the city plans to continue reinforcing its enforcement-based agenda by applying cutting-edge data capabilities to find high-amount tax evaders, develop decent revenue streams, and so on.
He also discussed the need to promote a “culture of honest tax payment” by ensuring that crypto holdings are no longer outside tax authority action.
Jeju, South Korea’s largest tourist island, with a track history of crypto innovation, like NFT tourist cards and blockchain-based solutions for COVID-19 tracing and overall history of familiarity with the digital asset sector.
Also Read: Terraform Labs’s Do Kwon Pleads Guilty To U.S. Fraud Charges Over $40B Crypto Collapse
South Korea’s Track Record of Crypto Seizures
The recent raid in Jeju adds to the increasing list of cryptocurrency seizures in South Korea in recent years.
In 2021, for example, the authorities in Seoul seized $22 million in cryptocurrency from private citizens and the heads of companies who were accused of tax delinquency.
Also, national regulators have indicated they seized a collective total of $180 million in crypto from individuals and companies who were tax evaders in the period from 2021 to 2022.
More recently, the city of Paju announced its plans in late 2023 to seize and sell all cryptocurrencies of residents who were tax delinquent.
These activities mark a continuing commitment from South Korea to integrate cryptocurrency within its broader tax enforcement strategy, meaning full-stoppers on possible schemes for cryptocurrency evasion.
Broader Regulatory Developments in South Korea’s Crypto Sector
The action in Jeju is part of a nationwide effort to increase regulation of the cryptocurrency industry.
UnoCrypto reported on March 5th, 2025, that South Korea’s Financial Intelligence Unit (FIU) introduced rules to further combat money laundering and fraud associated with cryptocurrencies, stating sophisticated digital asset crime is rising.
Also, earlier this month, we also reported that South Korea’s regulatory environment turned even more severe, as Bitsonic exchange CEO Shin Jin-wook received a second prison sentence for fraud, manipulating trading records and token prices.
Both developments indicate a vigorous and national effort to balance the regulation of cryptocurrencies, as governments deal with shielding taxes from evasion, fraud and other financial misconduct.
Also Read: South Korea’s Central Bank Announces Cryptoassets Department Amid Growing Number of Crypto Users