The ICON Foundation, creator of the ICON (ICX) project, has issued an official response to the news that South Korean tax authorities are investigating its technical partner, ICONLOOP.
In a statement released Monday, ICON Foundation President Min Kim said that the ICON Foundation would not be affected by the investigation, pointing out that ICONLOOP works as an independent entity.
The ICON Foundation is a non-profit organization based in Switzerland. At the end of 2017 it made an initial coin offering for the native ICON blockchain currency, ICX, raising more than $ 42 million the process.
ICONLOOP is the technical partner of the ICON Foundation, which operates in South Korea, and is the creator of the “loopchain” technology on which ICON is based. The Seoul government has previously employed it in various blockchain pilot projects such as COVID-19 tracking apps, COVID-19 tracking apps, mobile driving licenses.
But apparently previous relationships counted for very little at the end of February, when the Seoul Regional Tax Office sent 10 employees to ICONLOOP headquarters in Euljiro. The investigation appears to be ongoing, according to a March 8 article in local media Paxnet. People say that This type of investigation usually lasts 3 months, and the final sentence is expected to be announced in June.
ICONLOOP is the second blockchain company investigated by Korean tax authorities this year. In January, it launched an investigation into Grupo HN, issuer of the HDAC token.
The official tax laws for the issuance of virtual assets in South Korea are expected to apply next year. Meanwhile, the National Tax Service has initiated tax evasion and accounting audits for large national virtual asset issuers.
Specific, The tax agency is investigating possible tax evasion that occurs when virtual assets issued by foreign foundations are transferred to South Korea. ICONLOOP is being investigated in relation to the possible transfer of the Ethereum (ETH) funds raised by the ICON Foundation in its 2017 ICO, whose details have not yet been disclosed to authorities. Apparently, ICONLOOP argues that it does not need to disclose the details of such transfers, as it operates as a small or medium-sized company, reports Paxnet.
In the official statement on Monday, ICON’s Min Kim emphasized the legal and jurisdictional distance between the foundation and ICONLOOP, saying:
“We want to make it clear that the ICON Foundation is not being investigated by the authorities of the Korean National Tax Service. The ICON Foundation is regulated by the Swiss Financial Market Supervisory Authority (FINMA). “
Kim stated that the investigation will not affect the ICON Foundation, nor the ICON project in general, adding that all legal requirements have been met.. Kim said: “ICONLOOP operates independently of the ICON Foundation. ICONLOOP is an important technical partner of the ICON Foundation.” He also added:
“We are confident that this research will not affect the results and progress of the ICON project.”
Cointelegraph sought further comment and clarification from the ICON Foundation and ICONLOOP. This article will be updated in case they respond.
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