Bithumb Crypto Exchange Under Tax Investigation in South Korea
• South Korean crypto exchange Bithumb has been subject to a special tax investigation by the National Tax Service
• Prosecutors have summoned the suspected largest shareholder of Bithumb for questioning
• The investigation is looking into possible cases of domestic and international tax evasion
South Korean crypto exchange Bithumb has been hit with a double whammy from the country’s tax and legal authorities. The National Tax Service (NTS) has launched a special tax investigation into Bithumb Korea and Bithumb Holdings, the two companies that operate the Bithumb trading platform. Moreover, prosecutors have summoned the suspected largest shareholder for questioning.
The investigation is being carried out by a branch of the Bureau of Investigation of the Seoul Regional Tax Service that deals with “special tax investigations.” The NTS aims to examine cases of possible tax evasion by examining the domestic and international transactions of Bithumb Korea, Bithumb Holdings, and affiliate companies. This isn’t the first time Bithumb has been subject to a tax investigation; in 2018, the exchange was hit with a tax bill worth over $64 million.
The ownership of the exchange is thought to be highly “complex,” with many shareholders owning stakes. These include a number of publicly listed companies that have no other ties to the blockchain or crypto industries. In late 2020, the Vice President of one of these firms was found dead outside his home in what was believed to be a suicide. Police believe the man had destroyed evidence related to the Bithumb investigation.
In response to the investigation, Bithumb has issued a statement refuting any allegations of wrongdoing, and has pledged to cooperate with the NTS during the investigation. Nevertheless, the investigation has raised further questions about the security of cryptocurrency exchanges in South Korea and their compliance with tax laws.
The investigation is ongoing, and the outcome of the investigation could have major implications for the crypto industry in South Korea. If the allegations of tax evasion are proven, it could lead to hefty fines or other punitive measures being taken against the exchange and its shareholders. It also could lead to increased scrutiny of other exchanges in the country, as well as stricter regulations and enforcement.