November 24, 2024

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Korea's major cryptocurrency exchange Bithumb said Friday that it will cover all the 40 billion won ($30 million) of taxes imposed on the winners of its crypto airdrop events.

According to Bithumb, some 10,700 users were slapped with a combined 20 billion won in taxes last year for their compensations, including virtual assets and paybacks on commission, worth 83 billion won earned after participating in its multiple airdrop events held between 2018 and 2021.

In Korea, the tax authorities have not yet levied taxes on gains from crypto trading as the taxation scheme has been deferred until January 2025.

But the National Tax Service said the compensations should be subject to “other income” taxes like those imposed on prizes, honorariums and lottery winnings even though they were offered as cryptocurrency.

Bithumb refuted the claim and filed a complaint against the tax agency. Regardless of the ongoing legal dispute, the exchange operator said it paid the taxes to protect its users’ interests.

In January, the NTS also notified the airdrop winners of an additional 19 billion won in taxes. Bithumb said the new taxes also will be covered by the exchange.

“We are aware that the users were frustrated with the taxation. The company will support our customers,” an official from Bithumb said. “Bithumb will become a company that takes legal and ethical responsibility to protect its users.”

By Im Eun-byel (silverstar@heraldcorp.com)