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The next phase in South Korea’s crackdown on cryptocurrencies

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South Korean regulators have asked banks to provide information on their cryptocurrency clients. As the regulators try to understand the complex cryptocurrency sphere, a regulatory body in the country has asked banks to reveal information about corporate accounts of cryptocurrency exchanges that are not listed on real-name basis.

The country had launched a crackdown on the crypto industry as cryptocurrencies have contributed to a surge in illegal activities like money laundering and tax evasion in South Korea. Various regulatory bodies have joined hands in order to curb the problem with straight monitoring of the crypto industry. Laws have also been passed to help regulate the market as much as possible.

One of the controversial laws in a 20% capital gains tax imposed on all cryptocurrency profits. The law is set to come into effect in January 2021 and have resulted in a public outcry. Another not-so-controversial law requires users to create accounts on crypto exchanges only on real-name basis. The Act on Reporting and Using Specified Transaction Information has been in effect since March.

However, only four major cryptocurrency exchanges in South Korea have complied with the law by setting up real name basis accounts while the rest are lagging. The regulators in the country are not taking well to the non-compliance which is why an unnamed regulator has asked bank to reveal privileged information about such corporate clients.

The crackdown is set to last till June and it appears the regulators have full intentions of utilizing the time efficiently. Earlier, the city of Seoul had seized $22 million worth of cryptocurrencies from tax delinquents. The city’s tax authority, National Tax Service had issued a list of 1,566 individuals and companies with overdue taxes. $22 million worth of cryptocurrencies had been confiscated from 676 of the 1,566 identified tax evaders.

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