Bithumb Claims Victory In 130M Won Corporate Tax Lawsuit

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As a seasoned crypto investor with a keen interest in the intricacies of digital asset regulations worldwide, this recent decision by the Seoul High Court Administration Department has undeniably caught my attention. Having navigated through numerous regulatory hurdles and legal battles over the years, I’ve learned to appreciate victories like Bithumb’s corporate tax lawsuit win.

1-3 of the Seoul High Court Administration Department has recently made a decision in favor of the Bithumb Korean cryptocurrency exchange, overturning certain tax charges. The ruling, led by Judges Lee Seung-han, Shim Jun-bo, and Kim Jong-ho, orders the removal of charges totaling 130 million won ($97,141) related to a 2019 corporate tax lawsuit. This decision has garnered attention within the broader industry as cryptocurrency exchanges face ongoing regulatory challenges worldwide.

Bithumb Secures Legal Win In Corporate Tax Lawsuit

Based on a report from Naver News, it was decided by the Seoul High Court Administration Department on August 20th that a significant amount of tax charges against the Korean cryptocurrency exchange were unwarranted. The court ruled in favor of the exchange’s appeal, which aimed to overturn income taxes imposed by multiple tax authorities across the country, such as the Yeoksam tax office.

Interestingly, the court’s latest decision seems to suggest that Bithumb did not break any laws, providing a reprieve for the cryptocurrency exchange. To provide some background, this lawsuit was initiated in 2019, with the Korean crypto exchange being ordered to pay an enormous penalty of 130 million Won in corporate tax claims. However, it’s worth mentioning that regulatory bodies accused Bithumb of altering its inventory valuation method without adhering to regulations.

Despite the lack of specific regulations during the change of Bithumb’s business model at the time, the court’s recent decision suggests that the evaluation method used was suitable and did not breach any rules.

A Brief History Of The Corporate Tax Lawsuit

Previously, the court decided that Bithumb didn’t have a valid reason for switching their asset valuation method and failed to inform the tax authorities about this change as required by law when making such a switch. This oversight significantly impacted Bithumb during their legal proceedings.

Despite the lack of specific accounting regulations in 2017, a recent ruling has granted us the flexibility to adopt the ‘Total Average Act’ as our virtual asset evaluation method. Previously, we had been employing the ‘first-in, first-out’ method for inventory valuation, but we transitioned to the ‘total average method’ in 2017, a decision that was subject to close examination by national regulatory authorities.

As a researcher, I’ve been tracking the developments at this cryptocurrency exchange. Initially, allegations of inflated profit reports led to an initial tax penalty of approximately $134,503 (180 million won). However, this penalty was later reduced to around $97,141 (130 million won), a significant reduction that has now been fully settled. This milestone underscores the exchange’s resilience in navigating complex legal landscapes. Simultaneously, the exchange is grappling with another legal challenge as the Seoul Court intensifies its scrutiny on the exchange due to the XENT lawsuit.

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2024-08-22 15:44