Cryptofin Partners With Seum Tax to Support NTS Source-of-Funds Probe Response Solution

Cryptofin, a virtual-asset financial management platform formerly known as CryptoTax, has partnered with South Korean tax firm Seum Tax to support crypto investors responding to National Tax Service source-of-funds investigations.

DoubleXSoft, the operator of Cryptofin, said on October 23 it will provide its virtual-asset tax solution to Seum Tax. Seum Tax, which specializes in information-technology startups and virtual assets, has become the first partner for Cryptofin’s tax solution.

Cryptofin will collect and organize virtual-asset trading records, while Seum Tax’s tax accountants specializing in crypto taxation will build the explanatory case and handle responses to investigations based on those materials. Seum Tax will oversee the entire process after transaction data is collected, including the launch of an inquiry, submission of supporting materials and the close of a tax investigation.

The partnership was formed to meet demand from investors who need to document the movement of crypto investment funds. Since February, proceeds from virtual-asset sales have been added to the disclosure form for home-purchase financing plans, meaning buyers who use crypto sale proceeds to buy a home must report the amount.

The challenge is that explaining an investor’s flow of funds requires gathering records scattered across exchanges and personal wallets and linking them to proof of the original acquisition funds, according to Cryptofin. It also said data formats and transaction classification methods vary by exchange, while records may be difficult to secure for defunct exchanges or delisted assets.

Cryptofin’s solution automates that data collection and organization process. Seum Tax will use the data provided by Cryptofin to design explanatory logic that meets tax authority standards.

The two companies will also hold a demonstration event for the solution on October 28 at the Korea Foundation for Advanced Studies building in Seoul’s Gangnam district. The event is aimed at individual crypto investors as well as tax accountants and certified public accountants advising investment clients.

At the event, Kim Ji-ho, Seum Tax’s representative tax accountant, will present real cases involving responses to crypto-related source-of-funds investigations. The session will also cover practical issues including collecting transaction records from overseas exchanges and personal wallets, linking proof for older acquisition funds, and policy and legislative trends.

Choi Byung-jun, chief executive officer of DoubleXSoft, plans to demonstrate Cryptofin’s source-of-funds investigation response function. “The starting point for explaining the source of funds is complete and well-organized transaction data,” Choi said. He added that the company’s work with Seum Tax created a structure in which accurate data and expert explanatory logic run through a consistent process.

Kim said Seum Tax will use the dedicated solution to process complex data accurately and build explanatory logic that meets regulatory verification standards so investors do not face unfair tax assessments.