South Korea's National Tax Service requires residents to report overseas crypto exchange accounts even after bankruptcy, with threshold of KRW 500M per month-end.
Regulation & Gov ·
South Korea's National Tax Service has clarified that residents must report overseas cryptocurrency exchange accounts to tax authorities even when those exchanges have become insolvent and no longer permit trading or asset withdrawals. The reporting requirement applies to accounts holding balances exceeding KRW 500 million as of any month-end, with disclosures due in June of the subsequent year. This mandate extends to crypto-asset accounts regardless of the exchange's operational status.
The directive represents a continuation of rules introduced in 2023 that brought cryptocurrency holdings within South Korea's foreign financial account reporting framework. The threshold of KRW 500 million per month-end balance determines which accounts trigger the disclosure obligation, establishing a consistent standard across active and defunct platforms.
The practical implications for residents holding assets on bankrupt exchanges remain unclear—specifically whether the reporting requirement applies if account access is entirely impossible or if the balance cannot be verified. The extent to which the tax authority will enforce these provisions against accounts on defunct platforms has not been detailed.