The South Korean regulators have started investigating two major cryptocurrency exchanges. The country’s National Tax Service has conducted an on-site investigation of Bithumb and Coinone. In addition, Coinone is also being investigated by the Korean police for allegedly offering illegal gambling services to investors.
Also read: South Korea Urges 23 Countries, EU, and IMF to Collaborate on Curbing Crypto Trading
Tax Authority Investigating Bithumb and Coinone
The South Korean National Tax Service (NTS) has launched a tax investigation of two of the country’s largest bitcoin exchanges, Bithumb and Coinone, Yonhap reported on Wednesday.
“The Seoul Regional Tax Office is investigating books and related materials including sales figures,” the news outlet described. Investigators were sent to Bithumb’s headquarters in Gangnam-gu and Coinone’s headquarters in Yeouido.
“It’s true that the NTS has come out with an investigation, but it is difficult to confirm the details of the investigation,” Bithumb was quoted by the Hankook-Ilbo. The publication elaborated:
The investigation is related to the virtual currency taxation industry analysis. The government is considering ways to impose a capital gains tax on virtual currency investment returns.
Coinone said the tax investigators asked basic questions such as the company size and the number of employees, the Hankyoreh detailed. According to SBS News, in addition to asking questions, the “investigators have confiscated financial data and computer hard disks” from Bithumb.
The Korean regulators are actively discussing ways to tax cryptocurrencies. Last week, they announced that some taxes are possible under the current law such as corporate tax, as news.Bitcoin.com previously reported.
Coinone Also Investigated by Police
In addition to being probed by the NTS, Coinone is also being investigated by the South Korean police, local publications reported on Tuesday. The police have launched “investigations of margin transactions that took place via Coinone, viewing them as gambling and a breach of the Capital Markets Act,” the Korea Herald explained. Cryptocurrency exchanges are not licensed to offer such services. The Hankook-Ilbo elaborated:
The police believe that Coinone is a kind of gambling [business] that provides members with a margin trading service that predicts the market price after a maximum of one week and chooses the number of short sales and makes profit or loss according to the result.
However, a Coinone official contested, stating that “We have already reviewed the law [to ensure] that there is no illegality before starting the service, and we have already stopped the service from concerns of the financial authorities.”
What do you think of the Korean government launching investigations of Bithumb and Coinone? Do you think more crypto exchanges will be investigated? Let us know in the comments section below.
Images courtesy of Shutterstock, Bithumb, Coinone.
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