• South Korean crypto exchange Bithumb has been hit with a double whammy from the South Korean tax and legal authorities.
• National Tax Service has launched a special tax investigation into Bithumb Korea and Bithumb Holdings, and prosecutors have summoned its suspected largest shareholder for questioning.
• The NTS wants to examine the domestic and international transactions of Bithumb Korea, Bithumb Holdings, and affiliate companies.
The South Korean crypto exchange Bithumb has been hit with a double whammy from the South Korean tax and legal authorities. The National Tax Service (NTS) has launched a special tax investigation into Bithumb Korea and Bithumb Holdings, the two companies that operate the Bithumb trading platform. NTS officers were dispatched to the headquarters of both companies, in the Gangnam District of Seoul, on January 10.
The investigation is being conducted by a branch of the Bureau of Investigation of the Seoul Regional Tax Service that deals with “special tax investigations”. NTS will examine cases of possible tax evasion. The NTS is also looking into the domestic and international transactions of Bithumb Korea, Bithumb Holdings, and its affiliate companies.
The move follows a previous NTS investigation in 2018 that saw Bithumb hit with a tax bill worth over $64 million. In addition to this, prosecutors have also summoned the exchange’s suspected largest shareholder for questioning. The ownership of the exchange is thought to be highly “complex”, with many shareholders owning stakes in the company, including a number of publicly listed companies with no other ties to the blockchain or crypto industries.
The Vice President of one of these firms was found dead outside his home at the end of last year. Police called the death a “suspected suicide”, and it was reported that the man had destroyed evidence of his involvement with Bithumb.
The news of the investigation and questioning comes at an already difficult time for the exchange, as its 7-day trading volumes have been dropping. Nonetheless, the exchange still remains South Korea’s largest crypto exchange.
It is unclear how the latest investigation will affect the exchange, as no details of the exact nature of the investigation have been released. However, it is likely that the NTS will look closely at the exchange’s operations, and it may face further fines or other penalties if it is found to have acted illegally.