(Seoul=News1) Song Hwa-yeon = Upbit, a Korean cryptocurrency trading site, has announced an official position on ‘withdrawal service restriction on foreign users’.
Upbit announced that on the 19th that “the tax base and tax amount for foreign users cannot be finalized, so it is inevitable to lift the withdrawal restrictions.”
Upbit acknowledged for the first time that the withdrawal restrictions were related to Bithumb’s tax burden.
Last year on December 27, Bithumb said, “On November 25, we were imposed a tax of 80.3 billion won in relation to withholding of foreign customers’ income taxes.” NTS asked Bithumb to pay the income taxes of foreign investors who traded cryptocurrencies through Bithumb.
At that time, the industry fell into confusion when the NTS imposed taxes without a legal standard for cryptocurrency. When we asked if they had received similar actions with Bithumb by NTS, Upbit said, “We cannot confirm it.”
On the other hand, Upbit carried out the plan behind the scenes. Upbit began requiring additional KYC in the process of withdrawing KRW by foreign users in mid-December before Bithumb’s tax burden was officially known. Foreign users who have not gone through this process are not able to use the withdrawal service. However, in the process of enforcing this policy, there was no separate notice, so users with foreign nationalities had strong dissatisfaction.
In the announcement, Upbit explained “After recognizing that Bithumb was taxed by the NTS, Upbit has added a procedure to verify whether a foreign user is a resident of South Korea under the tax law during the preparation and review process.”
Upbit said, “We are working on a variety of ways, including cooperating with the taxation authorities to determine the exact tax base while operating the additional procedure, and consulting with a tax expert, including reviewing tax bases of other countries. But we have not yet been informed by the NTS about the exact tax base.”
Upbit also said, “In this situation, Upbit is unable to determine the tax base and tax amount for foreign users independently, so we cannot inevitably lift the withdrawal restrictions now and feel sorry for the inconvenience.” “We will make every effort to lift the withdrawal restrictions for foreign users who have completed the KYC process as soon as possible,” Upbit added.
Upbit has been reviewing the law because of fear of becoming the next target after Bithumb, but Upbit has not found any other particular way to correct it. This is because there is no legal standard in Korea.
The industry is complaining that “The basis is loophole” that the NTS said it would collect taxes from trading sites without a legal standard for cryptocurrency. Bithumb paid off taxes of 80.3 billion won at the end of December last year.
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