TechFlow news, on August 22, according to South Korean news website Naver, cryptocurrency exchange Bithumb has achieved a complete victory in an appeal case involving 130 million won in corporate taxes. On August 20, the Administrative Division 1-3 of Seoul High Court overturned the lower court's partial ruling and ruled in full favor of Bithumb.
The case originated from tax authorities imposing corporate taxes on Bithumb in 2019. The central issue was whether Bithumb’s change from the "first-in, first-out" method to the "weighted average cost" method for valuing assets between 2014 and 2016 was lawful. Tax authorities argued this change had understated profits, a position supported by the initial trial court.
However, the appellate court disagreed. It stated that in 2017 there were no clear accounting guidelines for virtual assets, so Bithumb had the right to adopt the "weighted average cost" method. More importantly, the court emphasized that Bithumb primarily earns revenue through transaction fees and that its holdings of virtual assets should not be classified as inventory assets in the traditional sense—thus eliminating the need to report changes in valuation methods to tax authorities.
