[Exclusive] Upbit probed for legal fees

[Anchor]

It has been confirmed that Upbit, the number one virtual asset exchange in the country, paid over 10 billion won in attorney fees for its largest shareholder and executives using company funds.

As a result, the National Tax Service is conducting a special tax investigation, suspecting that they paid less corporate tax.

Reporter Song Su-jin has the exclusive coverage.

[Report]

Chairman Song Chi-hyung is the largest shareholder holding 26% of Upbit's shares.

Chairman Song and three other executives were indicted without detention in 2018.

The charges were for "wash trading," where they bought and sold assets to themselves.

They were accused of inflating trading volumes by creating fake accounts and trading various virtual assets worth over 4.2 trillion won, including Bitcoin.

Chairman Song and others formed a legal team with major law firms such as Kim & Chang, Lee & Ko, and Shin & Kim, and after more than five years of trials, the Supreme Court ultimately acquitted them.

The ruling was based on the fact that key evidence regarding the fake accounts had been unlawfully obtained.

While they avoided criminal penalties, the National Tax Service is now investigating the legal fees.

It has been confirmed that Upbit spent over 10 billion won of company money on attorney fees for Chairman Song and others.

Only the largest shareholder and individuals were indicted, not the company, and it is judged that they should not have paid attorney fees for transactions that are not normal business activities.

This means that the accounting profits were reduced by the amount of the attorney fees, and corporate taxes were unjustly lowered.

[Ahn Soo-nam/Tax Accountant: "Only costs related to the company's revenue should be treated as company expenses; personal private costs should not be treated as company expenses."]

Upbit did not deny that it paid attorney fees with company funds.

However, it maintains that the payments were for lawsuits related to the legitimate duties of executives and employees, arguing that there is no issue.

In 2019, Hyosung Group was also imposed with hundreds of billions of won in penalties for processing attorney fees for the owner family with company funds, and they have been disputing this at the Tax Tribunal for over five years.

This is KBS News, Song Su-jin.