South Korea pilots digital assets seizure for traffic fines settlement

Getting your Trinity Audio player ready...

The South Korean National Police Agency (KNPA) has successfully carried out a pilot program that will give police the power to seize digital assets from the exchange accounts of individuals who failed to settle their traffic fines.

Local news outlet Jungo Ilbo reports that the city of Gunpo, a town in the suburbs of Seoul, was the first place to test the initiative, which is part of the police agency’s “untact” on contactless law enforcement strategy that began due to the coronavirus disease pandemic.

The scheme also includes notification of delinquents over the social media platform Kakao in addition to mail. The police department’s KakaoTalk channel provides payment information and information on offenders.

The report notes that the pilot project appears to have been a success. The Gunpo Police Department’s fines collection rate has improved significantly. In the first half of 2022, the city’s police collected 88% of their projected yearly traffic fines collection amount. It has amassed traffic fines amounting to $668,000 while having a goal of $759,000 for the year.

However, digital assets seizure has contributed a small share of the fines collected as they are only a measure taken in cases where funds in the individual’s bank accounts have been exhausted. The trial only saw delinquent fines totaling an excess of about $759 collected from one individual.

South Korea determined to tax digital assets after comprehensive regulations

The KNPA’s move builds on the government’s plan to increase scrutiny of digital assets tax evaders. The program, first introduced in 2021, includes provisions to confiscate the digital assets holdings of tax delinquents.

This month, the South Korean National Tax Agency (NTS) also vowed to tighten all digital assets tax evasion loopholes. However, its push to introduce a comprehensive digital assets tax regime has been stalled by the new president-elect.

President Yoon Suk-yeol has moved back a proposed 20% tax regime for the market to 2025, in line with his campaign promise of only taxing digital assets when comprehensive regulations are in place.

South Korea is not the only country looking to expand its tax focus on the digital assets market. Bloomberg reported recently that the U.S. Internal Revenue Service (IRS) has been going after digital assets exchanges to have them turn in user information for tax auditing purposes.

Watch: The BSV Global Blockchain Convention presentation, NFTs: What Can We Do Better?

https://www.youtube.com/watch?v=GBpE–I9b1s&feature=youtu.be