eToday reported that Bithumb, South Korea’s largest cryptocurrency exchange, has been cleared of all charges related to alleged tax evasion for the year 2017. The decision to drop the charges was announced on June 8, following an intensive audit of Bithumb’s accounting records. The company paid its normal tax bill of $28 million in won in mid-April.
“The Tax Service has conducted a review of the accounting records of the years from the 2014 to 2017 business years. Bithumb has paid the appropriate fees and taxes without objection,” an official from the National Tax Service stated. “Although a very large tax amount was imposed, it does not mean that there was any implication of tax evasion from the exchange. No charges of tax evasion have been or will be pressed against the exchange at this time.”(Translated quote.)
Bithumb reported a net profit of 427.2KRW for the year 2017, a 171-fold increase from its profit of 2.5 billion KRW in 2016.
Agents Began the Audit in January
The audit reportedly began in January, when the South Korean National Tax Service placed several agents from its Seoul office at Bithumb’s headquarters. Over the course of the next three months, the agents collected data regarding the income that the exchange was receiving from trading commissions; they also recorded profits from virtual currency dividends.
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Bithumb has reportedly stated that they had not been informed of the results of the investigation prior to the public announcement; the National Tax Service made contradictory claims.
A report from TheNews.Asia pointed out that the smooth passage of the audit “highlights an increased trust and stability in the Korean cryptocurrency market.”
While Authorities Approve Bithumb, They Crack Down on Coinone
However, Bithumb’s successful audit coincides with accusations by Korean police that crypto exchange Coinone’s offering of margin trading options is an illegal gambling operation that could be used for money laundering.
“We do not think it is illegal because it has been legally reviewed by lawyers before the margin trading service,” an employee of Coinone told Yonhap news. “Since we did not receive interest on the portion of the margin that allowed us to trade four times the margin, I can not see it. ” (Translated quote.)