South Korea inspects cryptocurrency exchanges for tax evasion
The South Korean tax authority this week carried out inspections at major exchanges, such as Coinone and Bithumb. The inspections follow on from similar investigations at banks to combat money laundering and crime.
Coinone told Reuters that officials from the national tax authority visited and that the company is cooperating with the investigation. The local police have been investigating the company for some time, because it is suspected that gambling is taking place, according to an anonymous employee of the company. A representative of Bithumb also says the tax authority paid a visit and asked for documents. Another employee confirmed this to Coindesk and said the police had not been involved.
Earlier this week, South Korea’s financial regulator announced inspections had taken place at six commercial banks that allow trading on cryptocurrency exchanges. The purpose of the inspections is to check whether the institutions comply with the anti-money laundering rules. In addition, traders must be able to identify their customers this month and the inspections must demonstrate whether the banks have taken the necessary measures.
The possible closure of South Korean exchanges was again in the news on Thursday. Reuters reports that South Korean Justice Minister Park Sang-ki announced in a press conference that such a law is in the works. He said: “There are major concerns about virtual currencies and the Justice Department is preparing a law that should effectively ban trading via exchanges.” The decision is said to have been preceded by discussions between the Ministry of Finance and the financial regulators in the country.
A spokesman for the South Korean president told The Korea Herald that a closure is one of the measures that the Ministry of Justice is considering. However, no final decision has been made yet. According to information from the South Korean site Edaily, there is still no consensus on the plans. News about the possible closure led to a fall in, among other things, the bitcoin price.