Authorities in the South Korean city of Paju, located in the country’s Gyeonggi Province, have announced plans to seize and sell the cryptocurrency holdings of citizens with unpaid taxes.

On Nov. 18, local media outlet Yonhap News reported that Paju city officials had sent notices to 17 people with unpaid taxes of 124 million Korean won, worth around $88,600. 

The city has warned these taxpayers that their crypto assets on exchanges will be confiscated and sold if the debts are not settled by the end of November.

Paju city officials will track down debtors’ crypto assets

Officials in Paju City emphasized their commitment to tracking down assets and enforcing penalties on tax evaders. Authorities said the move sends a clear message that individuals cannot use cryptocurrency to hide assets.

Yonhap noted that cryptocurrencies have become a popular means of evading debt collection in South Korea.

This will not be the first time tax authorities in Paju will seize cryptocurrencies owned by tax debtors. On July 29, Paju officials seized 100 million won (around $72,000) in crypto assets owned by tax delinquents. 

Officials explained that the decision to seize crypto assets from exchanges stems from citizens deliberately converting funds into digital assets to avoid tax payments, despite having the means to pay their dues. The authorities believe the funds were converted into crypto to avoid tax payments. 

South Korean bank looks to tokenize VAT

Meanwhile, a South Korean bank seeks to tokenize value-added tax (VAT) refunds in the country. On Nov. 13, NongHyup Bank signed a Memorandum of Understanding with digital assets platform Fireblocks, hoping to launch a prototype for tokenized tax refunds. 

Fireblocks said the bank will use the company’s tokenization engine in a pilot project to refund goods and services tax and VAT on retail outlet purchases. 

Fireblocks co-founder and CEO Michael Shaulov said that with tokenization, unique digital identifiers can be assigned to assets, allowing real-time tracking from issuance to settlement. Because of this, there are no risks of manual error or fraud.

The executive explained that this reduces operational costs and provides an “immutable record” to enhance trust between clients and banks. 

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