The Seoul High Court Administration Department recently absolved Bithumb of a massive 130 million won corporate tax charge.
The Seoul High Court Administration Department 1-3 has recently ruled in favor of the South Korean crypto exchange, Bithumb, regarding an appeal to eliminate specific tax charges.
Presided over by Judges Lee Seung-han, Shim Jun-bo, and Kim Jong-ho, the court ordered the dismissal of charges amounting to 130 million won ($97,141) tied to a 2019 corporate tax lawsuit.
This decision has quickly gained attention across the industry as crypto exchanges globally continue to navigate regulatory challenges.
Bithumb Achieves Legal Victory in Corporate Tax Dispute
According to a report by Naver News, on August 20, the Seoul High Court Administration Department ruled in favor of Bithumb, clearing the crypto exchange of significant tax charges after it appealed for the cancellation of income taxes imposed by various authorities, including the Yeoksam tax office.
Interestingly, the court’s recent decision suggested that Bithumb did not violate any laws, providing relief to the crypto exchange.
To provide context, the lawsuit, which began in 2019, initially imposed a hefty penalty of 130 million won in corporate tax charges on Bithumb.
Regulatory authorities had accused the exchange of illegally altering its inventory valuation method, allegedly defying regulations.
However, the court’s latest ruling stated that the “initial absence of apt regulations at the time of Bithumb’s business model changes indicates that the valuation method was appropriate and not in violation.”
A Brief Overview of the Corporate Tax Dispute
Previously, the court had ruled that “there is no special reason for the change of the evaluation method, and when changing the inventory asset evaluation method according to the law, Bithumb did not report it separately even though it had to be reported to the tax authorities.”
This earlier decision had posed a significant challenge for Bithumb in its legal battle.
Nonetheless, the latest ruling clarified that “there were no regulations on accounting in 2017, so Bithumb can choose the ‘Total Average Act’ as a virtual asset evaluation method.”
In context, Bithumb initially used the ‘first-in, first-out method’ for inventory valuation before switching to the ‘total average method’ in 2017, a decision that was closely scrutinized by the nation’s regulatory authorities.
Additionally, the exchange was accused of overreporting profits, which led to an initial tax charge of 180 million won ($134,503). This amount was later reduced to 130 million won ($97,141), which has now been entirely dismissed.
This ruling represents a significant victory for the crypto exchange. Meanwhile, Bithumb continues to face another legal challenge as the Seoul Court intensifies its scrutiny in the ongoing XENT lawsuit.
