Following the tax raid on Bithumb, South Korea’s largest cryptocurrency exchange in January 2018, officials from the National Tax Service of South Korea have stated that their tax investigation of Bithumb turned up “no illegal activities such as tax evasion.”
The Gangnam Raid
A team of over a dozen agents from the Seoul Metropolitan Taxation office raided Bithumb headquarters in Gangnam-gu, Seoul, and seized several computers and critical accounting data as part of a tax investigation.
The National Tax Service (NTS) confirmed the development to South Korean local media, and stated that a tax liability amounting to 30 billion Won ($27.89 million) was placed on Bithumb in August 2017, while clarifying the company duly paid the amount. Furthermore, the officials revealed that the National Tax Service, the agency responsible for tax assessments, completed the tax investigation in April 2018.
Bithumb was scrutinized by the South Korean Internal Revenue Service (IRS), and the massive tax was levied after a thorough audit. However, the IRS did not find any proof of illegal activities such as tax evasion.
A tax official stated:
“The IRS has conducted a tax investigation against Bithumb for the 2014 to 2017 business years. I know that Bithumb has decided to pay the related taxes without any objection to the imposed tax amount. However, no proof of tax evasion was found, so prosecution charges against Bithumb were not filed.”
The IRS investigation focused on the taxes levied on Bithumb’s commission income and how to adequately account for its cryptocurrency assets for taxation purposes. On its part, Bithumb continues to record high sales volumes, with its recently released business report showing revenue of 333.4 billion won ($310 million) in 2017.
All’s Well that Ends Well
The news is a relief for Bithumb after grappling with negative publicity over the recent months. In May 2018, it faced a storm of criticism for its role in the Popchain token scandal and was forced to restrict operations for users in 11 countries under the Non-Cooperative Countries and Territories (NCCT) framework.
The news of its exoneration comes at an essential time for investor confidence as it prepares to launch its native cryptocurrency, Bithumb Coin.