Bithumb, South Korea’s largest cryptocurrency exchange, has been hit with a tax bill of 80.3 billion won, equivalent to around $69.5 million, by the country’s National Tax Service.
According to local news outlet Business Korea, The National Tax Service (NTS) has concluded Bithumb failed to withhold the taxes of its foreign customers’ income, an obligation the exchange had. The NTS categorized Bithumb’s cryptocurrency trading of those outside South Korea as “miscellaneous income,” and is recognizing capital gains from crypto trading as “assets.”
An official of the Korean Tax Service was quoted as saying:
The matter is being handled by the Investigation Department of the Korea Tax Service and a local tax office. We need to find out what taxation standards have been used and how the tax amount has been calculated.
Bithumb’s largest shareholder, Vidente, has confirmed the tax bill was slapped onto Bithumb Korea, a subsidiary of Bithumb Holdings. It may, however, be subject to change as Bithumb is reportedly planning to take legal action as it’s not proper for the NTS to “impose the withholding tax on the company as it pays the corporate tax and local income tax for its operating profit every year.”
Business Korea pointed out some industry analysts claimed the Korea Tax Service may have “established taxational grounds such as withholding taxes” based on investigations conducted into exchange like Bithumb and CoinOne in January of last year.
Some experts, however, point out it’s hard to identify who is and isn’t trading in South Korea based on cryptocurrency wallet addresses, which means the NTS might’ve used users’ cell phone numbers or country codes to identify foreign customers.
Bithumb, despite being South Korea’s largest cryptocurrency exchange, has been struggling. The trading platform was hacked twice, with hackers taking over $30 million worth of cryptocurrency last year, and breaching its security again earlier this year to steal $13 million worth of EOS and $6.2 million worth of XRP from its hot wallets.
Moreover, last year the exchange totaled a $180 million loss, partly due to the bear market the space faced.
Featured image via Pixabay.