A South Korean tax dispute over 67 BTC has been sent back for review after authorities treated a brief transfer through a spouse’s overseas exchange account as a taxable gift. The bitcoin reportedly stayed in the spouse’s account for only 2 to 8 minutes before being moved into the husband’s domestic exchange account, sold, and used to buy an apartment.
Travel Rule restrictions led to the transfer route
According to the report, the case traces back to a 2014 settlement agreement between the man, identified as A, and his spouse, B. Under that agreement, if A’s bitcoin later rose sharply in value and was used to purchase an apartment, A would pay B 33% of the purchase amount, citing B’s past financial support for his business and tuition.
Between July and October 2021, bitcoin doubled in price over roughly three months. A disposed of 80 BTC in total, selling 67 BTC to fund the apartment purchase and gifting 13 BTC to B. The assets had been stored in a Ledger hardware wallet held by A, but because of Travel Rule compliance requirements, the bitcoin could not be sent directly from a self-custodied wallet to a domestic exchange in a way that satisfied identity transmission rules. A then used B’s overseas exchange account as an intermediate step.
Tax office treated account flow as a spousal gift
When the Seoul Jamsil tax office reviewed the funding source for the apartment purchase, it saw a transfer trail showing funds moving from B’s overseas exchange account into A’s domestic exchange account. On that basis, it classified the transaction as property gifted from spouse to spouse and imposed gift tax.
A challenged that conclusion on three grounds. He argued that the bitcoin remained in B’s account for less than 10 minutes, so there was no real transfer of ownership. He also said the 2014 agreement showed the bitcoin had always been his separate property. In addition, he pointed to the fact that 13 of the 80 BTC remained under B’s name, which matched his claim that only those 13 BTC had actually been gifted to her.
Tribunal says beneficial ownership needs a fresh review
South Korea’s tax authority responded that the records still showed B transferring value to A, and that the couple used the same computer and the same Ledger hardware wallet, making it difficult to determine who actually controlled the wallet.
In its ruling, the Tax Tribunal said key materials submitted by A — including the settlement agreement, a gift contract, and photos of the hardware wallet — had not been presented during the original tax audit and were not fully examined. It found the earlier investigation insufficient on the question of who actually owned and controlled the wallet. Rather than canceling the tax assessment outright, the tribunal ordered a reinvestigation and told the tax authority to review the evidence again before deciding the beneficial owner of the bitcoin.
The dispute centers on a basic legal question for crypto assets: whether account routing can be treated as proof of ownership transfer. The report said South Korea has few clear precedents involving cold wallets, intermediary exchange accounts, and tax treatment shaped by Travel Rule compliance.