South Korean cryptocurrency exchange Upbit introduced tighter user ID requirements in mid-December 2019 and began to restrict the withdrawal of funds for foreign clients. It was assumed that this measure is aimed at eliminating the consequences of the hack of the platform – at the end of November, it lost 342,000 ETH. However, after two months, 6,300 traders from China are still unable to get their assets, Jinse reports..
Korean exchange Upbit explains the reasons for the refusal to withdraw funds from foreign clients
As Upbit herself explained on February 19, the restrictions are related to the tightening of international standards for user identification and the requirements of the local tax department..
“Upbit works closely with the tax authorities to ensure that standards are strictly adhered to and with tax law experts to apply tax standards to the residents of each country,” the exchange writes..
Jinse reports that users from China and other foreign jurisdictions do not intend to let the situation take its course and admit that the real reason may lie in the financial predicament of the exchange due to hacking or a decrease in trading volumes. A lawyer close to Upbit told Jinse that the company tried to use 20% of foreign clients’ funds to pay off tax arrears..
At the end of December became known, that the authorities South Korea intend to collect $ 67 million in tax from the Bithumb exchange for operations to withdraw funds from its foreign clients, which Upbit also mentions in its message.
“In this situation, Upbit cannot determine the tax and its amount at its discretion. Unfortunately, because of this, we are unable to remove the withdrawal restriction. We apologize for the inconvenience caused and will do our best to activate the withdrawal of funds for foreign clients who have passed identification, ”the company adds..
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