Sold delinquent's coins to collect taxes…Seoul district's first 'virtual asset cash conversion'

Seodaemun District directly sold a delinquent taxpayer's virtual assets to collect overdue local taxes. Among Seoul's 25 autonomous districts, this is the first case to handle 'seizure → transfer → cash conversion' of virtual assets entirely in-house.

Seodaemun District said on the 6th that "on the 1st, the district transferred and sold seized virtual assets through a district corporate account opened at a virtual asset exchange and settled the arrears." While the district had been seizing virtual assets since 2021, it had faced limits because there was no suitable means of disposition (cashing out), preventing actual collection until now.

This year the district opened corporate accounts at major exchanges such as Upbit, Bithumb and Korbit. The structure is to safely transfer seized virtual assets from the taxpayer's wallet to the district account and then sell them sequentially according to market prices. The linkage with exchanges speeds up disposal procedures and is cited as an advantage because it can reduce the risk of losses due to volatility.

Seodaemun District plans to continue pursuing seizure and cash conversion for delinquent taxpayers holding virtual assets, starting with this direct sale. In concrete operational processes, the district said it will strengthen internal controls—such as notifying delinquents, keeping records of transfers and sales, and applying sales proceeds to arrears—to minimize grounds for disputes.

Lee Seong-heon, Seodaemun District head, said, "We will actively explore collection techniques adapted to the changing financial environment so that diligent taxpayers do not feel relatively deprived," and added, "We will enhance the effectiveness of delinquency management in response to the growth of the virtual asset market."

Using virtual assets for local tax collection can increase recovery speed compared with existing delinquency dispositions focused on nonfinancial assets (deposits, wages, real estate, etc.), so its spread to other districts is drawing attention. The district plans to revise related manuals and accumulate cases to develop a standard model.

Kwon Yong-hoon reporter fact@hankyung.com