South Korean cryptocurrency exchange Bithumb Goes to Court Over $69M Tax Bill

According to a report published by The Korea Times on Jan. 16, Bithumb filed a complaint with the NTS, suggesting that the imposed tax bill is groundless given that cryptocurrency is not a legally recognized currency. The South Korean tax tribunal now has to decide whether to grant or dismiss the exchange’s motion within 90 days.

NTS imposed a retention tax — an income tax paid to the government by the payer of the income instead of its recipient — which is often withheld or deducted from income in most jurisdictions, according to The Korea Times.

As a consequence, Bithumb is expected to pay the bill before giving the remaining income to its customers. An exchange official commented:

“We paid the full amount and have since been preparing for arguments. We believe we will be given a chance to clarify our stance in court.”

Is a clear tax scheme in South Korea forthcoming?

According to The Korea Times, Choi said that the current case with Bithumb could be a ploy by the NTS to establish grounds for taxing what were previously tax-free gains. She added that, as cryptocurrency trading has grown more common in South Korea, regulators have now likely come to view the subsequent gains as a new source of taxable income.