South Korean Internal Revenue Service raided two major crypto currency exchanges, the Department of Justice plans to draft a bill to ban the encryption of currency exchanges

nBankruptcy commentary: Yesterday, the South Korean Internal Revenue Service raided two major exchanges in the country – Bithumb and Coinone, launched a site investigation of the two exchanges were also confirmed on the news. In addition, Coinone was also investigated by South Korean police because of or suspected of providing illegal gambling services to investors. Since morning, there have been repeated reports that the South Korean government will shut down all the digital currency exchanges, thus triggering a panic-stricken currency, with almost all currencies ushering in a sharp fall. According to South Korean news agency SBS, the South Korean Ministry of Justice is preparing legislation to clear the way for a complete closure of the domestic exchange.n
nTranslation: Clovern
South Korean regulators started a survey of two major cryptocurrencies. The country’s National Tax Service conducted a site survey of Bithumb and Coinone yesterday. In addition, Coinone was also investigated by South Korean police on the alleged involvement of the exchange in providing illegal gambling services to investors.n
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Tax authorities investigate Bithumb and Coinonen
According to Yonhap, South Korea’s National Revenue Agency (NTS) launched a probe into Bithumb, the country’s two largest Bitcoin exchanges, and Coinone.n
The news agency said:n
n”The Seoul Local Taxation Bureau is investigating data on both exchanges, including sales figures.”n
nInvestigators traveled to Bithumb’s headquarters in Gangnam, Seoul, as well as Coinone’s headquarters in Yeouido, Seoul.n
In an interview with Hankook-Ilbo, Bithumb said “the IRS did come forward to investigate the exchange, but it is difficult to confirm the details of the investigation at this moment.” The media said in detail:n
“This survey involves an analysis of the virtual currency tax industry, and the South Korean government is considering how to levy a capital gains tax on the return on investment in virtual currency.”n
Hankyoreh reported in detail that Coinone said the tax investigators asked basic questions about the size of the company and the number of employees. According to SBS news reports, in addition to these questions, investigators also checked Bithumb’s financial data and computer hard drives.n
South Korean regulators are actively discussing ways of taxing cryptocurrencies. As news.Bitcoin.com reported earlier, last week they announced that they could levy some taxes (such as corporate income tax) under the current tax code.n
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Coinone was investigated by South Korean policen
South Korean local media reported that in addition to the IRS investigation, Coinone was also subjected to a South Korean police investigation. The Korea Herald explained that the police “have investigated the margin transaction offered by Coinone and believe that the exchange-listed transaction is a gambling service that violates the Capital Market Law.” At the moment crypto currency exchanges do not have a license to provide such services.n
In the view of the police, the margin trading service Coinone provides to its members is a gambling business, which predicts market prices up to a week later and chooses to sell short and profit or loss based on the result.n
However, one Coinone executive argued:n
n”We have carefully studied the relevant laws to ensure that there is no unlawful act before we start the service and we have stopped the service due to the concerns of the financial institutions.”n
nReuters also conducted a survey of the IRS raids. Coinone staff also confirmed to Reuters they are actively cooperating with the investigation.n
However, as of this morning, there have been repeated reports that the government will shut down all digital currency exchanges, triggering a currency panic and falling sharply in almost all currencies.n
According to South Korean news agency SBS, the South Korean Ministry of Justice is preparing legislation to clear the way for a complete closure of the domestic exchange.n
The SBS report said: “The Department of Justice will make a bill stating that the virtual currency brokerage company itself is an offense that completely shut down the exchange and plans to start a full deployment of the discussion this week.”n
Then Reuters reported that the South Korean Ministry of Justice will introduce the relevant bills.n
Media quoted Park Sang-ki as saying:n
n”The virtual currency is a huge source of concern for us and the DOJ is essentially drafting a bill that forbids the trading of cryptocurrencies over the exchange.”n
nThe news shows that South Korean regulators have significantly strengthened their censorship of cryptocurrencies. Earlier this week, the Korean Financial Intelligence Unit and the Financial Supervisory Service announced they were investigating whether six undisclosed banks adhered to anti-money laundering and “know your customers (KYC) “rule.n
The South Korean government announced in December that it will take a more rigorous scrutiny of exchanges as its volume of exchanges increases, including such measures as a ban on anonymous trading.n
Korea Exchange cryptocurrency prices have been higher than other market prices. In fact, Earlier this week controversy arose because CoinMarketCap, a well-known data services organization, excluded the price of Korea Exchange in its cryptographic currency mean calculation.n

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