Bithumb takes $69M crypto tax bill to South Korea court

Getting your Trinity Audio player ready...

Crypto exchange Bithumb has filed a complaint with a court in South Korea, as it seeks to nullify a $69 million bill from the country’s tax agency.

The National Tax Service slapped Bithumb with a demand for the money as withholding tax on foreign customers of the exchange. In doing so, it categorized the trading activities of exchange users as miscellaneous income, with capital gain amounts recorded as assets.

Despite paying the bill in the first instance, Bithumb has said the National Tax Service (NTS) has no basis on which to levy the charges, refuting its claim over the proper categorization of cryptocurrencies traded through its platform.

The case will now be heard by the Tax Tribunal, which has a period of 90 days to accept or dismiss the motion from the cryptocurrency exchange, the Korea Times reported.

A spokesperson for Bithumb was quoted saying the firm had been preparing arguments ahead of the anticipated court hearing on the matter: “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.”

Choi Hwoa-in, who advises the country’s Financial Supervisory Service, said she felt Bithumb’s move was a calculated attempt to secure a partial or full refund on the amount paid.

“Bithumb filing a suit after paying the full amount in that sense is a calculated move expecting partial to full return of the amount paid,” Choi said.

Choi said that under Korean law, cryptocurrencies were not assets, and were therefore outside the remit of the NTS. “The Ministry of Economy and Finance already made that clear. The NTS pushing ahead with the tax imposition is baseless and groundless, especially since it is still awaiting the ministry opinion on the same matter it sought again,” she said.

The move follows a $28 million tax bill handed to Bithumb in 2019.

A spokesperson for the country’s tax agency said they were unable to comment on ongoing cases, saying only that they will “await the judgment from the Tax Tribunal.”

It remains to be seen whether the Tax Tribunal agrees with Bithumb’s position.