Seoul, SOUTH KOREA – The world’s seventh largest cryptocurrency exchange by trade volume Bithumb, which posted US$397 mullion in revenues in 2017, will be putting US$27 million of its takings with the South Korean tax authorities. According to South Korea’s etoday news site, an audit of Bithumb, by the country’s Internal Revenue Service (IRS) in April confirmed no evidence of “any illegal activities such as tax evasion by the cryptocurrency exchange. A South Korean National Tax Service (NTS) official said in Korean,
“The IRS has conducted a tax investigation against Bithumb for the 2014 to 2017 business years.”
“We understand that Bithumb has decided to pay the related taxes without any objection to the imposed tax amount.”
The news was welcome by the South Korean cryptocurrency community as a sign of Seoul’s warming relationship with cryptocurrency once again.
The National Tax Services announced that after @BithumbOfficial 's audit they will be charged ~$30mil in taxes. Even better news? The IRS found no illegal activities such as tax evasion to have taken place. The investigation was completed mid April.
— Korean Cryptocurrency & Blockchain News (@BlockchainROK) June 8, 2018
Last month, South Korea’s highest lawmaking body, the National Assembly petitioned the government to lift the ban on initial coin offerings (ICO) which had been imposed since September last year. Citing the growing number of cryptocurrency companies and blockchain talent fleeing to other more crypto-friendly countries such as Singapore and Switzerland, South Korean lawmakers were keen to reverse the trend. A National Assembly committee dedicated to studying the “Fourth Industrial Revolution” recommended at a meeting on May 29 that it plans to “establish a legal basis for cryptocurrency trading, including permission for ICOs.” And according to South Korea’s Business Korea, lawmakers are recommending improvements to the “transparency” of the local cryptocurrency industry by “establishing a healthy trade order.”
The move by South Korea’s tax authorities should help shore up the price of Bitcoin and associated cryptocurrencies. Bitcoin continues to trade above it’s support level of US$7,500 and Ethereum flits around the US$600 according to data from Coinbase as at 12.30 a.m. Eastern Time. South Korea has long served as a conduit for crypto-crazed Chinese who are not able to transact in cryptocurrencies due to the ban in China. The trade has led to what some call the “Kimchi Premium” where prices of cryptocurrencies such as Bitcoin can sometimes be as much as 15 percent to 30 percent higher than cryptocurrency exchanges in other parts of the world. Chinese demand for cryptocurrencies has also led to the South Korean won being the third most traded currency in the world for Bitcoin.