The research division of the South Korean crypto exchange Korbit revealed that the amount of overseas digital assets reported by domestic corporations and individuals to the National Tax Service, “may be inflated.”
The significant value of the reported amount is probably pumped up during the process of reporting to the authorities, Korbit Research Centre notes.
Per the research, overseas corporations are believed to be holding their assets without being able to distribute them to the market, specifically after the (ICO) boom in 2017.
“If the holding amount is evaluated based on the market price created through self-trading, the value is inflated compared to the actual value,” the research arm noted, according to a .
According to South Korea’s National Tax Service, the total amount of digital assets held by domestic companies and individuals through foreign accounts amounts to 131 trillion won ($96 billion).
“Of this, 73%, or 120 trillion won, is owned by 73 corporations,” Korbit Research Center said. It added that the corporate crypto holdings worth 120 trillion won would be market price created artificially through high-price trading.
“Even if the actual value of the corporation’s overseas coin holdings is one-tenth of the reported amount, the figure is 12 trillion won. It will never be possible to ignore.”
Market Participants Head Overseas
The analysis by the research center further said that regulatory restrictions on the business scope of domestic companies to spot transactions and strictly control derivatives have resulted in market participants heading overseas.
As a result, individuals also pivot to overseas businesses in search of services that meet their needs, Korbit Research added.
“No matter how conservatively we look at the size of assets seeking needs that cannot be met domestically, the minimum is 10 trillion won, which can also be seen as a ‘national wealth outflow’ due to irrational regulations.”
Additionally, domestic investors storing crypto assets in overseas accounts could be due to possible tax evasion, the research predicts. However, there are questions whether they would voluntarily report their holdings to the National Tax Service.
