South Korea’s tax authority has confiscated more than 140 billion won ($106 million) in virtual assets, including Bitcoin and Ethereum, from tax delinquents over the past four years, highlighting the government’s widening use of digital assets to enforce compliance.
The National Tax Service (NTS) began seizing cryptocurrencies in 2021 from individuals who claimed to lack cash or real estate to cover overdue liabilities such as capital gains tax and inheritance tax.
Between 2021 and 2024, assets were seized from 14,140 people, according to data submitted to Democratic Party lawmaker Kim Young-jin on September 21.
The seizures were made possible by a 2018 Supreme Court ruling that recognised virtual assets as intangible property, akin to stocks or copyrights, and therefore subject to confiscation.
In the first year of enforcement, NTS seized 71.2 billion won from 5,741 individuals.
Some debtors were forced to liquidate Bitcoin and other holdings to settle dues, while others opted to raise cash through other means, expecting digital asset prices to rise further.
Authorities faced pushback from delinquents reluctant to sell during price downturns, saying liquidation would lock in losses.
To address this, an amendment to the National Tax Collection Act took effect in January 2022, allowing the NTS to sell seized crypto at market prices through domestic exchanges such as Upbit and Bithumb. The agency executed its first direct sale in May 2023.
From 2021 through 2023, the agency collected an average of 36.5 billion won annually in overdue taxes from seized crypto holdings.
“Delinquents are increasingly using new forms of assets like virtual currencies to hide their wealth,” Kim said, urging stronger monitoring and regulation of digital assets to enhance tax collection.
The seizures come as South Korea continues to tighten oversight of its cryptocurrency sector, which ranks among the world’s most active retail trading markets.