South Korean digital asset exchange Bithumb is the subject of a new investigation by the country’s National Tax Service (NTS), according to a report by the Yonhap News Agency.
The South Korean tax enforcer believes that Bithumb may have been engaged in tax evasion, an offense punishable by imprisonment or payment of fines. Hinging on this belief, the NTS launched a “special tax investigation” into the exchange’s activities and its subsidiaries to confirm its claims.
The investigation culminated in a raid on Bithumb’s office complex in Seoul on January 10 by operatives from the NTS. The raid was spearheaded by the 4th Bureau of Investigation of NTS in Seoul, the unit responsible for high-profile investigations within the NTS, often referred to as “The Grim Reaper of The Business World.”
“It is true that a special tax investigation is currently underway,” confirmed a Bithumb’s spokesperson. “We cannot confirm the details of the investigation.”
Preliminary details from the investigations revealed that the NTS would be poring over domestic and international transactions made in the previous tax window in search of discrepancies. Prosecutors have been questioning Bithumb’s largest shareholder Kang Jong-hyun over the case while investigations are currently underway on the exchange’s affiliates.
Bithumb had previously come within the radar of tax authorities as far back as 2018. An NTS probe resulted in Bithumb paying the authorities $64 million as income tax. At that time. Given Bithumb’s antecedents with the law and the intensity of the investigations, it remains unclear if the embattled exchange can wiggle its way out of the debacle.
Another day, another dilemma for Bithumb
Bithumb has been under investigation by law enforcement for the greater part of 2022, with the latest in the string of legal tango being the acquittal of its former chairman of fraud charges.
Shortly after the collapse of Terra, authorities raided the offices of the exchange in search of foul play in connection with the collapse. The firm’s headquarters was raided by the Seoul Metropolitan Police Agency’s Intelligence Crime Investigation Unit over the suspicious $25 million token sale hosted on the platform and the botched BTHMB deal.
In December, a top shareholder of the exchange Park Mo was found dead at his residence, with police treating the case as a suicide. Other large shareholders face investigations linked to embezzlement and stock manipulation from Korean law enforcement agencies.
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