Bithumb, the largest cryptocurrency exchange in South Korea, has been cleared by local financial authorities and the National Tax Service (NTS) of illicit activities, tax evasion, and suspicious business operations, reports CCN.
The South Korean government had been monitoring the exchange, along with UPbit, another of the country’s main exchanges, after investors had expressed concerns. Both companies were then investigated for potential malpractice and suspicious business activities.
It was found that apart from Bithumb being ordered to pay USD 28 million in taxes, neither the NTS, Financial Services Commission (FSC), or Korea Financial Intelligence Unit (KFIU), along with other government agencies could find any evidence of improper practices regarding either company.
According to the NTS, the agency closed its investigation into Bithumb in late April, imposing a USD 28 million tax on the company, this after the three month Seoul investigation involving seizure of various computer files, devices, and information necessary to run a full audit on the exchange’s cryptocurrency holdings and past activities. An NTS spokesman indicated:
“NTS initiated several investigations into Bithumb between 2014 and 2017, and over the past four years, Bithumb has continuously paid all of the taxes imposed to the company without any conflict with the NTS. While a USD 28 million tax was imposed onto Bithumb, no evidence [of] tax evasion and illicit activities were shown and the NTS closed the investigation into Bithumb officially, clearing the company.”
After a 171-fold increase in the company’s profits within a 12-month period, supported by a rapid surge in demand for cryptocurrency in the local market the NTS decided to take action. The agency commented that it wanted to very cryptocurrency company to declare all holdings, be transparent with their bookkeeping and declare their taxes.
The clean bill of health for Bithumb is a boon for the industry as a whole in South Korea. As the largest in the country, the exchange is synonymous with the whole concept of cryptocurrency and represents its successes and failings. Commentators suggest that the investigation clearing Bithumb of any wrongdoing will inject much-needed trust in the crypto space.
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