According to the National Tax Service, the overseas cryptocurrency exchange users who fail to report overseas account balances of more than 500 million won are going to face a fine. They are going to face a fine of up to 20% for the unreported amount.
Under this new rule, those who are having more than 500 million won worth the digital currencies in accounts overseas are going to be obliged to report details. This is going to take place at the end of any month throughout this year. They need to report details to the tax agency by June of the next year.
Any of the underreporting is going to be met with a 20 percent fine. In case the unreported amount exceeds 5 billion won, the accountholders might be referred for prosecution and have their identity revealed.
These measures are announced by NTS to identify the cryptocurrencies, which are no longer untaxable according to this revision with a related law. It recognizes digital currencies as the final assets. Initially, cryptocurrencies had not been recognized as an asset. And that is why it was hard for the government ministries to undertake the seizure measures, as they were allowed to do with the other assets related to criminal cases.
This step is reflecting criticism of the users of overseas crypto exchanges. An NTS official said, “Holders of virtual assets traded on overseas exchanges are difficult for the Korean government to identify due to limits in accessing user information preserved by countries the exchanges are based in. We will come up with further measures to crack down on attempts seeking to exploit loopholes in the system,”
This move comes as digital coins have been emerging as safe assets, which are highly viable alternatives to other financial products. According to the local cryptocurrency exchange, Upbit, this market index rose more than 9742 points.
This index encompasses all cryptocurrencies, which are trading in the local market. It has pegged the changes in the local market capitalization.
According to another exchange Bithumb, one bitcoin was trading near 66.8 million on Monday after exceeding 70 million won for the very first time. The price of bitcoin is staying below 20 million won in the past 3 years. However, it spiked near the end of 2020, and it is on a steep rise now.
Other 100 small crypto exchanges are expecting to close their businesses as the exchange operators are needed to meet the strengthened requirement. Otherwise, they are going to face a prison term for up to five years or a fine worth 50 million.
This is following a revision that is related to the law with the operating licenses, which is going to be granted to those who are having money laundering prevention measures.