Japanese Trader Gets Thrown Behind Bars for Tax Evasion

While cryptocurrency regulations in many countries remain vague or even non-existent, Japanese financial authorities demonstrate that they are not only capable of establishing the clear-cut legal framework for digital currencies but also imposing the existing laws on those who don’t want to share the profits with the state. 

Table of contents: 

1. Severe punishment for an unabiding cryptocurrency trader. 

2. The first man to land in jail for illicit crypto trading. 

Severe punishment for an unabiding cryptocurrency trader 

Last week, the Japanese newspaper Chunichi came out with the headline about an unfortunate office worker/cryptocurrency trader who must have thought that the obligation to pay taxes doesn’t concern him. The article said that the Kanazawa District Court had slapped the painful fine of 22 million yen, which approximates to $200,000, along with a year of jail time to a fellow named Hidej Matsuda. An office worker by day and cryptocurrency trader by night, Matsuda also became a criminal offender after being charged for breaching the Income Tax Law. 

At the end of the court hearing, the judge ruled that the accused had failed to provide accurate information concerning the income from his trading activity. The case material said that Matsuda had concealed the exact amount earned during the culmination of the crypto bubble of 2017-2018. The court established that the convicted had gained 74 million yen (close to $700,000) from cryptocurrency trading over the said period of time, while his official declaration showed only 1.2 million yen ($11,000) made through currency speculations.

The first man to land in jail for illicit crypto trading 

During the court hearings, the former office employee argued that he didn’t have a clear understanding of the profit-calculating method when filing the declaration, but the prosecution insisted that the 56-years-old clerk turned trader had given in to his greed and acted in a “self-centered manner.”         

The story said that the lawyers tried to pledge for pardon since the accused had filed several petitions regarding his willingness to make reparations for his wrongdoings by re-submitting the declaration and paying the imposed fine. But the judge didn’t give in to the pledges and let the verdict stand. After the trial was over, the shell-shocked Matsuda just uttered, “There is no doubt.” 

We don’t know if it would serve as a small consolation to Matsuda, but he had officially become the first-ever cryptocurrency trader in Japan to be found guilty of such charges and sentenced to jail after a rather long trial that began in 2020. But upon getting to know the tax rate that Japanese fiscal authorities impose on all activities that have to do with cryptocurrencies: trading, mining, or lending - up to 55%, which is unheard of in all other countries - one might understand the reasoning behind Matsuda’s actions, although 1xBit doesn’t encourage tax evasion of any kind.