Korean City Freezes Crypto from Tax Debtors in $14.2M Recovery Effort

Jeju City has frozen cryptocurrency holdings from 49 residents who owe local taxes after reviewing records from major South Korean exchanges. The city’s tax division announced the seizures on August 16.

The municipal tax office examined 2,962 local tax debtors who collectively owe 19.7 billion won ($14.2 million). Among these debtors, 49 people held digital assets worth approximately 230 million won. The city designated cryptocurrency exchanges as third-party debtors to freeze and seize these assets to settle unpaid tax obligations.

Officials reviewed account data from four major exchanges: Bithumb, Upbit (operated by Dunamu), Coinone, and Korbit. The review targeted residents owing at least 1 million won in local taxes. The seized crypto represents only a portion of the total outstanding tax debt but marks the first targets in the city’s current enforcement campaign.

Hwang Tae-hoon, head of Jeju City’s tax division, said the office will continue strengthening responses to tax delinquency using virtual assets to uncover hidden tax sources. He added that the office plans to pursue high-value delinquents through AI-based information analysis to secure substantial revenue.

The seizures follow South Korea’s 2021 law that enabled authorities to confiscate cryptocurrency from tax debtors. Local governments have since conducted targeted campaigns using this authority. Cities, including Seoul, have previously reported combined crypto confiscations worth hundreds of millions of dollars during 2021–2022.

Jeju City, the capital of South Korea’s island province, completed the full review recently as part of ongoing tax collection efforts. The seized assets will be applied directly to outstanding tax liabilities. The enforcement action demonstrates how local governments are increasingly targeting digital assets to recover unpaid taxes from residents who owe money to municipal authorities.

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