CryptoFin Partners With Seum Tax to Support National Tax Service Source-of-Funds Probes

CryptoFin, a digital-asset financial management platform formerly known as CryptoTax, has partnered with South Korean tax firm Seum Tax to help cryptocurrency investors respond to National Tax Service source-of-funds investigations.

DoubleXSoft, the operator of CryptoFin, said on Oct. 23 that it will provide its digital-asset tax solution to Seum Tax. The tax firm specializes in information-technology startups and digital assets, becoming the first partner to use CryptoFin’s tax solution.

CryptoFin will collect and organize cryptocurrency trading records. Tax accountants at Seum Tax who specialize in digital-asset taxation will use that data to prepare explanations for tax authorities and handle investigations. Once the trading data has been gathered, Seum Tax will oversee the full process, including the start of an investigation, submission of supporting materials and the close of a tax probe.

The partnership comes in response to growing demand for proof of the movement of cryptocurrency investment funds. Since February, proceeds from digital-asset sales have been added to disclosures in housing purchase financing plans. That means homebuyers using funds from crypto sales to purchase a home must include the amount in the filing.

The challenge is that explaining an investor’s flow of funds requires collecting records scattered across exchanges and personal wallets and linking them to documents showing the source of the original investment money. CryptoFin said data formats and transaction classifications differ by exchange, while records from defunct exchanges or delisted assets can be difficult to obtain.

CryptoFin’s solution automates that data collection and organization. Seum Tax will use the data provided by CryptoFin to build explanations that meet tax authorities’ standards.

The two companies will also hold a demonstration event for the solution on Oct. 28 at the Korea Foundation for Advanced Studies building in Seoul’s Gangnam district. The event is aimed at individual crypto investors, as well as tax accountants and accountants who manage investor clients.

At the event, Seum Tax Chief Tax Accountant Kim Ji-ho will present real-world cases involving explanations submitted in cryptocurrency source-of-funds investigations. The session will also cover practical issues such as collecting records from overseas exchanges and personal wallets, linking proof for older acquisition funds, and policy and legislative trends.

DoubleXSoft Chief Executive Officer Choi Byung-joon plans to demonstrate CryptoFin’s source-of-funds investigation response function. “The starting point for explaining the source of funds is complete and well-organized transaction data,” Choi said. He added that the company’s work with Seum Tax created a system in which accurate data and expert explanation logic are connected in a consistent flow.

Kim said complex data should be handled accurately through a dedicated solution, while explanation frameworks should be built to meet authorities’ verification standards. “We will see the process through to the end so investors do not face unfair tax assessments,” he added.