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The crypto industry in South Korea has come under increased scrutiny by regulators.
There are indications that South Korean crypto investment company, Hashed is under investigation for what may be tax evasion. A local news outlet made this revelation on Tuesday morning in a report.
According to the report, Hashed is being investigated by the 4th Bureau of Investigation of Seoul’s Regional Tax Office. While the reason for the audit is not known, the 4th Bureau is known to investigate cases of tax evasion and fraud.
Already in 2021, several companies have been investigated by the 4th Bureau. However, none of the investigated companies have been prosecuted. In light of that, Hashed does not have any cause for concern provided they’ve been doing as expected of them.
The spokesperson for the company said as much. He asserted that Hashed cooperated with the investigation by handing over all the requested documents to the authorities promptly. The investigation commenced in early November and will continue till the tail end of February 2022.
Hashed is a South Korean-based crypto-investment firm. Established about 4 years ago, the company has quickly grown into a trusted hand in the crypto space. It was recently in the news after raising $200 million for Web 3 projects last week. The company neglected to identify the name of the investors stating instead that support came from “the largest Korean IT companies, multi-discipline conglomerates and globally renowned investment firms”.
Prior to that, one year ago, it also announced funding to the tune of $120 million. The investment firm has in its portfolio up to 80 companies including several crypto-based projects. Some of the most popular are Cosmos, MakerDAO, and NFT/Metaverse brands Axle Infinity, and the Sandbox. It also has high stakes in Terra, the blockchain system backing the LUNA token. At the time of writing, LUNA was trading at $71.73.
The Regulatory Landscape in South Korea
The crypto industry in South Korea has come under increased scrutiny by regulators in the country. The South Korean Government in September announced that only 28 exchanges met its baseline requirements for operation. This forced many smaller exchanges to close down triggering concerns about market monopoly.
Apart from this, there has been a year-long legal battle between lawmakers about whether or not to tax crypto gains, and when to start. The matter finally reached a head when on December 3, the government finally passed a bill mandating a tax of 20% on any crypto gains over $2100. The bill is set to take effect by January 2023.