South Korea to Seize Crypto from Tax Evaders

South Korea is stepping up its enforcement against tax evaders using crypto. Gwacheon City, home to several major government offices, is rolling out an electronic asset seizure system next month, marking a significant move in the country’s approach to digital taxation.

The new system will enable authorities to track and confiscate digital assets from individuals with outstanding tax debts, ensuring that even hidden crypto holdings are accounted for. According to local reports, full-scale seizures are set to begin in the first half of the year.

Cracking Down on Hidden Crypto Holdings

Authorities have identified 361 residents who collectively owe more than $12.9 million (18.8 billion won) in unpaid local taxes. Officials plan to cross-check their records with data from major South Korean crypto exchanges to pinpoint undisclosed assets.

Although the national government has postponed the 20% crypto tax until 2027, local agencies already have the authority to seize digital assets from tax delinquents. Gwacheon officials believe this is a necessary step to close tax loopholes and ensure fairness.

“This measure is a decision to establish tax justice so that citizens who faithfully pay their taxes are not disadvantaged,” said Kang Min-ah, head of Gwacheon City’s Tax Division.

Warnings First, Seizures Next

Before confiscating any assets, officials will issue advance warnings, giving tax delinquents a chance to settle their dues voluntarily. If payments are not made within the deadline, the city will proceed with direct crypto seizures.

Gwacheon has already seized $206,000 (300 million won) worth of crypto over the past five years. Just in 2024, authorities recovered $75,500 (110 million won) in unpaid taxes. With the new system in place, the city expects stronger enforcement and quicker asset recovery.

“This is a strong response to tax delinquents,” Kang noted, emphasizing that authorities will “actively block tax evasion through the seizure of virtual assets.”

South Korea and India Tighten Crypto Tax Rules

While South Korea expands its crypto seizure efforts, India is taking an even tougher stance. The country’s 2025 Union Budget has proposed amendments allowing tax authorities to audit undisclosed crypto gains from the past 48 months.

Tax offenders in India could face a 70% penalty on unpaid crypto-related taxes. Meanwhile, the country’s controversial 30% tax on crypto earnings and 1% TDS (Tax Deducted at Source) on transactions remain unchanged, offering no relief to traders.

Both South Korea and India’s measures signal a global shift toward stricter crypto taxation, reinforcing the idea that digital assets are no longer outside the reach of regulators.

As governments tighten their grip, crypto holders may need to rethink their tax strategies—because in 2024, the era of tax-free digital wealth is coming to an end.