Crypto exchange Bithumb hit with a massive tax bill of over $69M

Exchanges • December 30, 2019, 4:30AM EST

South Korea's largest cryptocurrency exchange, Bithumb, has been hit with a hefty tax bill of 80.3 billion won (~$69.5 million).

Local media outlet Pulse reported the news on Monday, saying that Bithumb’s largest shareholder, Vidente Co., confirmed the tax claim in a regulatory filing on Friday.

South Korea's taxation authority, the National Tax Service (NTS), has reportedly levied withholding tax on Bithumb’s foreign customers' income. The NTS has categorized the exchange's cryptocurrency trading of foreigners as miscellaneous income, recognizing capital gains from crypto trading as “assets.”

Bithumb is planning to take legal action, and therefore, the final payment to the NTS may be subject to change, per the report. According to another report from Business Korea, Bithumb says it is not proper for the NTS to levy the withholding tax as the exchange pays corporate and local income taxes every year.

Last year as well, the NTS had hit Bithumb with a tax bill of around 30 billion won (almost $28 million at the time). It is not clear whether Bithumb had paid this tax. The Block has reached out to Bithumb for comments and will update this story if we hear back.

Other cryptocurrency exchanges such as Upbit and CoinOne are also on alert over the unexpected taxes from the government, according to the Business Korea report.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.