Tax Agency Finds South Korea's Biggest Cryptocurrency Exchange Not Guilty of Tax Evasion

Francisco Memoria
  • South Korean authorities conducted a three-month-long investigation into Bithumb's transaction records to evaluate its tax compliance.
  • The results saw Bithumb isn't guilty of tax evasion, but that it still needs to pay $28 million.

Bithumb, along with fellow exchange UPbit, was earlier this year hit with an investigation that saw various government agencies probe its operations, focusing on transaction histories to evaluate tax compliance. Recent reports suggest it was found not guilty of tax evasion.

According to local news outlet Yonhap, the National Tax Service (NTS), the Financial Services Commission (FSC) and the Korea Financial Intelligence Unit (KFIU), all started probing Bithumb, one of the country’s largest cryptocurrency exchanges, after investors raised concerns.

Earlier this year, the government raided the headquarters of UPbit in Seoul for allegedly deceiving investors, and almost immediately after turned to Bithumb over potential malpractice and suspicious business activities.

Specifically, the cryptocurrency exchange saw its profits rise by a factor of 171 last year, a figure that was released to the public because of its parent company BTCKorea, which is publicly owned. Interestingly, the surge could partly be attributed to the cryptocurrency space’s rise last year, which saw most cryptocurrencies hit new all-time highs.

The regulators’ investigation, which lasted for about three months, found that Bithumb’s revenues came from transaction and trading fees. An NTS representative stated:

"NTS initiated several investigations into Bithumb between 2014 and 2017, and over the past four years, Bithumb has continuously paid all of the taxes imposed to the company without any conflict with the NTS.”

NTS representative

Notably Bithumb wasn’t completely cleared, as according to the local news outlet the cryptocurrency exchange is now facing a massive bill of around 30 billion won ($28 million) for back taxes. The representative added:

“While a $28 million tax was imposed onto Bithumb, no evidence [of] tax evasion and illicit activities was shown and the NTS closed the investigation into Bithumb officially, clearing the company.”

NTS representative

In cooperation with South Korean authorities, Bithumb banned accounts from 11 countries as part of its anti-money laundering (AML) efforts. These countries were selected by the Financial Action Task Force for failure to comply with AML guidelines.

South Korean regulators have been keeping a close eye on the crypto space, as earlier this year they outlawed anonymous trading. Coinone, another local cryptocurrency exchange, is set to face charges for running an “illegal gambling operation” because it offers users margin

Weekly Newsletter

Crypto Wallet and DApp Explorer Toshi Rebrands to Coinbase Wallet

Francisco Memoria
  • Cryptocurrency wallet and DApp explorer Toshi has recently rebranded to Coinbase Wallet.
  • The San Francisco-based firm's new wallet will add support for Bitcoin, Bitcoin Cash, and Litecoin.

Ethereum (ETH) wallet and decentralized application (DApp) explorer Toshi is rebranding to Coinbase Wallet in a move the company claims isn’t “just a new name, but part of a larger effort to invest in products that will define the future of the decentralized web.”

According to a recent blog post published by Toshi’s Product Lead Siddharth Coelho-Prabhu, users who have the Toshi wallet installed on their mobile devices will soon see it upgrade to Coinbase Wallet and can look forward to seeing the “same great product” with a new look.

Toshi was developed by San Francisco-based cryptocurrency exchange Coinbase over a year ago. It’s as an Ethereum and ERC-20 token wallet, and a DApp explorer that can be used for “exploring the decentralized web.” The company’s goal with it was to reportedly offer users a way to manage their crypto holdings and access the decentralized web that’s as easy as downloading a mobile app.

Per the blog post, Toshi was the world’s first mobile DApp browser, and the first wallet to launch crypto collectibles. While it was the first one, the Opera browser recently launched a mobile browser for Android with a built-in crypto wallet, which it’s set to add to its desktop browser, that supports crypto collectibles.

The post reads:

Coinbase Wallet is one part of our effort to accelerate the adoption of crypto and dapps around the world. We’re looking forward to keeping our community updated as we continue to build the most secure and easy to use crypto wallet in the space.

Siddharth Coelho-Prabhu

According to Coinbase’s blog post, its wallet will “very soon” going to add support for Bitcoin, Bitcoin Cash, and Litecoin. Users will be able to receive airdropped tokens from initial coin offerings (ICOs) and buy crypto collectibles, fungible tokens available in games like CryptoKitties.

As a DApp explorer, it further lets users explore the “full universe of third-party dapps” and access decentralized cryptocurrency exchanges to buy and sell tokens. The DApp universe, per Coinbase, can let users earn crypto “by answering questions, performing services, or completing tasks.”

When it comes to security, the company touted its wallet will be using the “best-in-class secure storage,” which is set to ensure its users’ funds are secure through their device’s “Secure Enclave and biometric authentication technology.”

Per Coinbase, its wallet may help increase cryptocurrency adoption. As CryptoGlobe covered, the San Francisco-based cryptocurrency was adding 50,000 users a day last year, and now has over 13 million users. It’s so popular that cryptocurrencies surge when added to its platforms. Recently, Ethereum Classic saw its price rise 19% after it announced it was adding it to Coinbase Consumer