The South District Prosecutors’ Office in Seoul has launched a raid on the Investigation Bureau 3 of the Seoul Regional Tax Office, suspecting a tax evasion case involving a crypto asset firm’s CEO and possible collusion with tax officials.
The investigation stems from the arrest of CEO “A”, who was indicted in January for manipulating cryptocurrency prices and securing illicit profits of approximately KRW 7.1 billion (around USD 5.3 million) between July and October 2024. Prosecutors suspect that A’s tax payments—only about KRW 17 million—were significantly understated following an inadequate source-of-funds audit by the tax office for the years 2017 to 2022.
Authorities are now examining whether tax officials may have intentionally or negligently overlooked irregularities. The prosecutors recently summoned an official who was directly involved in A’s audit and are analyzing materials seized during the raid.
A was accused of placing fake buy orders and engaging in wash trading to manipulate coin prices, later selling them at a premium. His assets, including a KRW 3.3 billion lease deposit for an apartment in Gangnam and approximately KRW 3.5 billion worth of crypto, were confiscated as criminal proceeds.
This case is being handled by the Virtual Asset Crime Joint Investigation Unit, launched in February. The unit includes over 30 specialists from the Financial Supervisory Service, Financial Services Commission, KRX, and the National Tax and Customs Services, tasked with tackling illegal crypto schemes and cross-border financial crime.
Should allegations of collusion within the tax office prove true, it could significantly undermine public trust in the taxation system and regulatory oversight of virtual assets in Korea.
