According to the research unit from the South Korean cryptocurrency exchange Korbit, the figures regarding international digital assets declared domestically to the National Tax Service could be possibly exaggerated. The high value of the reported digital assets is presumably inflated during regulation procedures, states the research by Korbit. Additionally, it is suggested that international corporations may be retaining their crypto assets without the capability to distribute them to the broader market. This is particularly true post the boom of the initial coin offering (ICO) in 2017.
A thorough evaluation reveals that the stated value could be inflated when compared to its actual worth since the market price is based on self-trading. This was disclosed by the research unit via a local news outlet. As per the South Korean National Tax Service, domestic businesses and individuals own digital assets valued at approximately 131 trillion (KRW $96 billion) owned via foreign accounts.
At present, it is estimated that 73 corporations own about 73% (totals to 120 trillion won) of the total. There is a growing inclination towards market price creation via artificial high-price trading which impacts the corporate crypto holding values. Even so, if the true value of the businesses’ international coin holdings is merely 10% of the declared amount, the figures involved should be around 12 trillion. It is a figure that cannot be simply disregarded.
Market players seeking to evade restrictive regulations on local businesses have started moving overseas, as per Korbit’s research. It limits company capabilities for spot trades and imposes rigid control over derivatives. As such conditions prompt corporations abroad, individuals are also prompted to seek for businesses overseas that serve their needs.
Domestic issues and a gap in the market potentially leading to a wealth outflow, forces individuals to seek transactional safety overseas. Even in conservative viewpoints, the size of assets seeking alternative resources that cannot be domestically met rounds up to a minimum of 10 trillion won. Such a shift could potentially be seen as a ‘national wealth outflow’ due to irrational regulations.
Additionally, there could be a possibility of tax evasion by domestic investors utilizing overseas accounts to store their crypto assets. While the research indicates this, it simultaneously raises doubts about the future voluntary compliance in reporting such high-value holdings to the National Tax Service.
Source: Cryptonews
