Bithumb Claims Victory In 130M Won Corporate Tax Lawsuit

The Seoul High Court Administration Department 1-3 has recently ruled in favor of the Bithumb Korean crypto exchange, cancelling certain tax charges on the firm. The regulatory body mandated clearing the exchange of charges worth 130 million won ($97,141) attributable to a 2019 corporate tax lawsuit. This development has promptly gained significant traction across the broader industry as crypto exchanges continue to tackle regulatory uncertainty globally.

Bithumb Secures Legal Win In Corporate Tax Lawsuit

According to a Naver News report, the Seoul High Court Administration Department on August 20 cleared the Korean crypto exchange of massive tax charges, ruling in favor of the its appeal. The exchange’s appeal called for the cancellation of income tax imposed by various authorities nationwide, including the Yeoksam tax office.

Intriguingly, the court’s recent ruling hinted that Bithumb was not in violation of laws, offering relief to the crypto exchange in its latest decision. For context, the lawsuit began in 2019 and mandating the Korean crypto exchange for a whopping 130 million Won penalty in corporate tax charges. Notably, regulatory authorities claimed that the crypto exchange illegally changed its inventory evaluation process, disregarding regulations.

Nevertheless, the court’s latest ruling mentioned 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 History Of The Corporate Tax Lawsuit

The court previously 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 presented the crypto exchange with quite a setback in its lawsuit.

Nonetheless, the latest ruling added 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, the exchange initially used the ‘first-in, first-out method’ for inventory valuation till it finally migrated to the ‘total average method in 2017. This decision was under heightened scrutiny nation’s regulatory authorities.

Also, the exchange was accused of overreporting profits, which called for initial tax charges of 180 million won ($134,503) However, it was reduced to 130 million won ($97,141), which now has been completely eradicated. This marks a landmark for the crypto firm. Meanwhile, the exchange continues to tackle another legal battle as the Seoul Court tightens its grip over the exchange regarding the XENT lawsuit.