Bulletpoints:
• South Korean National Tax Service has launched an investigation into Bithumb, a cryptocurrency exchange based in South Korea.
• The investigation is looking into potential tax evasion by examining domestic and international transactions of Bithumb Korea, Bithumb Holdings and its affiliates.
• In 2018, Bithumb underwent a special tax investigation by the NTS, which it won roughly $64 million in income tax from.
South Korean National Tax Service (NTS) has launched an investigation into Bithumb, a cryptocurrency exchange based in South Korea. The raid was conducted on the exchange’s headquarters in Seoul, as part of a compliance investigation. The agents are exploring the possibility of tax evasion by examining the domestic and international transactions of Bithumb Korea, Bithumb Holdings and its affiliates, as well as any possible tax evasion related to the ownership of Bithumb.
The investigation was carried out by the 4th Bureau of Investigation of the Seoul Regional Tax Service, which specifically investigates “special tax investigations”. This comes after Bithumb’s former chair, Lee Jung-Hoon, was acquitted of $70 million in fraud charges on Jan. 3.
The investigation comes after Park Mo—an executive at the largest shareholder of Bithumb—was found dead on Dec. 30. He was under investigation by local authorities for embezzlement and stock price manipulation. His death was the latest in a slew of crypto billionaires who died within a month of each other, including MakerDAO co-founder Nikolai Mushegian and QuadrigaCX founder Gerald Cotten.
This isn’t the first time that Bithumb has been under investigation by the NTS. In 2018, the agency conducted a special tax investigation, which Bithumb won, resulting in the exchange receiving roughly $64 million in income tax.
It remains to be seen how the investigation by the NTS will affect Bithumb and the cryptocurrency industry in South Korea as a whole. Nevertheless, the investigation is a reminder of the importance of regulatory compliance within the cryptocurrency space, and the potential consequences of failing to comply with the applicable laws.