Cryptocurrency is emerging as a new tool for tax enforcement in South Korea. Recently, the Jeju Provincial Government seized virtual assets held by a delinquent taxpayer and successfully liquidated them through Korbit, one of Korea’s licensed cryptocurrency exchanges. The proceeds were then converted into Korean won and used to offset unpaid local taxes. This marks the first known case of a regional government directly executing such a process using an official crypto exchange.
Initially, the province had offered the taxpayer an opportunity to voluntarily dispose of the assets, but after the deadline passed without action, authorities proceeded with direct seizure and sale. The transaction was executed using a government-registered corporate account and dedicated wallet address, ensuring proper legal and financial controls throughout the process.
Korbit, which facilitated the transaction, stated that it will expand its technical and operational support for local governments looking to recover delinquent funds through crypto. The exchange also announced plans to develop standardized guidelines to support such future actions.
The move comes amid growing concerns among public officials that high-value tax delinquents increasingly hide their assets in cryptocurrencies, making traditional enforcement methods less effective. A Jeju official noted, “We will continue to strengthen our efforts to trace and reclaim hidden crypto assets,” adding that these actions help close the enforcement gap left by conventional collection methods.
This case goes beyond simple tax collection. It signals that local governments are now equipped with the institutional and technological capacity to handle digital assets directly, setting a precedent that other provinces may soon follow.
