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South Korean Govt Certain About Taxing Crypto In 2022

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Governments across the globe started taxing crypto ever since they began seeing people garner profits by trading crypto. South Korea joined the list.

South Korea had time and again revealed its interest in crypto. The country is not only famous for its booming pop culture but also its inclination towards cryptocurrencies. Therefore, the government of the Asian country decided to levy a tax on trading a wide range of digital assets.

South Korea’s Tax On Crypto “Inevitable”

Back in February, the South Korean government affirmed that it would be taxing cryptocurrencies. The Ministry of Economy and Finance of the country revealed that all the profits made by trading cryptocurrencies would be subject to a 20% tax. However, the range of profits incurred while trading assets like Bitcoin [BTC] was limited to gains over 2.5 million won or $2,300. Those whose profits fall below these numbers are reportedly exempted from this tax.

While the taxing of crypto was scheduled to start off from 2022, the country’s finance minister, Hong Nam-ki went on to affirm the same, Reuters reported. Speaking at a news conference, the finance minister of the country, Hong Nam-ki was urged to delay this as the government needed a better rendering of the crypto-verse. But the finance minister asserted that taxing cryptocurrencies were “inevitable.” He added,

“It’s inevitable, we will need to impose taxes on gains from trading of virtual assets.”

The sudden emergence of cryptocurrencies has left the world in a frenzy. While some countries are preparing for the accommodation of these assets, a few others have outrightly started to ban cryptocurrencies.

Furthermore, governments have had a hard time categorizing cryptocurrencies. While some have put these assets under commodities a few others have labeled them securities. Hong Nam-ki, however, suggested that cryptocurrencies were “intangible assets” and not currencies. He even added that calling them currencies would be a “misunderstanding.”

Additionally, the country was seen taking impeccable precautions to dodge any possible scams against those using crypto. Earlier in March, the government announced that any crypto platforms that failed to have strong anti-money laundering processes in place would be subject to heavy fines.

Bithumb Garners The Attention Of Naver As A Potential Stakeholder

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The crypto industry is booming by the day. The interest in acquiring a stake in Bithumb, a prominent cryptocurrency exchange, headquartered in South Korea is substantial proof for the same.

Bitcoin and an array of other coins elevated the interest and adoption rate of crypto. This further brought in institutional interest in these digital assets. While several speculated that this was temporary, the inclination of notable platforms seeking a stake in Bithumb shows that the enthusiasm has prolonged. More recently, a leading South Korean internet firm revealed its interest in garnering a stake in Bithumb.

Bithumb Has Over 10 Firms Seeking A Stake

A local news portal affirmed that the South Korean internet giant, Naver has been talking to Vidente, a Bithumb stakeholder with regard to a possible equity stake in the cryptocurrency exchange. Naver joined the list of over ten other platforms seeking a stake in South Korea’s largest cryptocurrency exchange.

This list included major banks like JP Morgan, Morgan Stanley as well as Changpeng Zhao’s Binance. Visa, the payments platform is also looking to garner a stake at the crypto exchange. Additionally, rumors regarding Deutsche Bank jumping onto this bandwagon also surfaced.

Currently, the Chairman of Bithumb holds over 65% stake in the exchange, whereas Vidente owns over 34%.

Similar to all the other platforms, Naver intends to dive into the crypto-verse. The internet firm has been looking into inducing Bitcoin [BTC] as a method of payment on its Naver Pay and Line Pay in Japan and the United States.

Furthermore, the stringent laws that the Korean government has been imposing have left several crypto platforms in the country in a state of anxiety. OKEx Korea will reportedly shut shop giving users time until 7 April 2021. The post read,

“OKEx Korea service has ended on April 7th. We would like to thank all of our customers who have used OKEx Korea in the meantime, and we hope that you must check the information below regarding the termination of the service.”

South Korea To Spruce Up Its Money Laundering Processes

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The emergence of K-Pop has put South Korea on a pedestal. Along with this, the country made it clear that it intends to jump on the crypto bandwagon as well. The country went on to recognize cryptocurrencies by levying taxes on them. More recently, the financial regulators of South Korea revealed that they were looking to strengthen the money laundering laws that govern cryptocurrency exchanges.

In a recent announcement made by the country’s Financial Services Commission [FSC], it was noted that cryptocurrency platforms that fail to impanel powerful anti-money laundering laws would have to face the wrath of hefty fines.

South Korea’s Latest Move To Strengthen AML Laws

The financial watchdog in its announcement clarified that any platform that forfeitures these laws post 20 April 2021 would be subject to fines of between 30% all the way up to 60%. FSC further wrote,

“Under the revised regulation, financial institutions and VASPs will be subject to penalties if they are found to be in violation of internal control duties (e.g. failure to report suspicious transaction activities), data maintenance duties (e.g. failure to keep relevant data on suspicious transactions) and duties specifically pertaining to VASPs (e.g. failure to keep separate management of customers’ transactions records).”

Additionally, the fines would largely be based on the size of the respective crypto platform. Smaller fines would be imposed on small crypto exchanges in case of failure to follow AML laws.

The demand for crypto is thriving and countries across the globe have been bolstering their hold on the crypto industry. Despite this, there are many countries that have failed to put in place laws concerning money laundering. Prominent South Korean crypto exchange, Bithumb explained that it was taking the right measures ahead of this newly introduced law.

A local news portal revealed that Bithumb would ban users from countries that have no anti-money laundering processes in place. A Bithumb official reportedly said,

“The company will continue improving its system to protect investors, and enhancing transparency in the crypto market.”

South Korea To Levy 20% Tax On BTC

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South Korea has been emerging as a global leader with its pop culture. The country decided to jump on the crypto bandwagon by recognizing these digital assets. South Korea has time and again revealed its intention of taxing cryptocurrencies, now the government has announced a date that it would start taxing these assets.

While this law is soon to be implemented, a prominent member of the country’s central bank has exhibited angst about the volatile nature of cryptocurrencies.

South Korea To Tax Profits Acquired By Crypto in 2022

The price movement of Bitcoin in the past few days has certainly spruced up the adoption of crypto. While some governments are outrightly banning these assets, a few others seem to be reaping benefits by taxing them. South Korea joined the list of an array of countries that have levied a tax on crypto.

In a recent report by the Korean Herald, the Ministry of Economy and Finance of the country reportedly proclaimed that a 20% tax would be levied on the profits acquired by trading cryptocurrencies like Bitcoin. This would commence from 1 January 2022. However, those individuals who make profits lesser than $2,300 or 2.5 million won are exempted from this rule.

While this law helped recoginze Bitcoin as a part of the financial structure, 20% was a bit too much several officals believed. A police officer reportedly said,

“I sold stocks I was holding recently and started to invest in (digital) coins after seeing my colleague made a lot of money from them. I think it’s unfair to charge that much (cryptocurrency) tax when compared to taxes on stocks”

Furthermore, the government had expressed interest in going on board with tax rule in 2020, however, it seems to have been pushed to 2021.

Additionally, as these crypto-assets recorded a massive slump,  Lee Ju-yeo the Governor of the Bank of Korea. Once again, another authority has commented on the highly volatile nature of Bitcoin,

Binance Preps To Latch The Doors Of Its Korean Branch

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2020 is probably the worst year in history. Yet, some crypto platforms like Binance managed to thrive despite the setbacks caused by the COVID-19 pandemic. The exchange was seen diving into several new markets this year while keeping up with the developments pertaining to the platform. Bitcoin’s price movement has got every crypto platform busy at the moment, however, some platforms seem to be going out of business despite the ongoing bull run. One of Binance’s branch was seen undergoing the same.

Binance Korea To Close Shop Following Low Trading Volume

Binance makes sure to maintain its name in the headlines. The exchange is touted as the world’s largest crypto platform and hasn’t slipped down from its post. However, this time the exchange has made the headlines announcing the closure of a branch. In a recent blog post, the exchange alerted its users that it was going to pull the plug on Binance Korea.

The blog post revealed that BKRW charge up as well new registrations at the Korean wing of the exchange was put on hold on 24 December 2020. The trading services is scheduled to stop on 10 January 2021 post 1:00 PM KST. On 29 January 2021, a hard shutdown along with the delisting of BKRW/BUSD Liquid Swap and BKRW trading pairs would take place. Following this, the accounts of Binance KR users would be inaccessible.

The blog post read,

“Binance KR will terminate the local exchange operations due to low usage and volume with limited trading pairs of BKRW, resulting in limited liquidity for its users. Following the closure of the exchange, the Binance KR team will reassess its market strategy based on the resources and experience gained from operating a local exchange.”

It seems like the interest of South Koreans in crypto isn’t very high. The crypto platform’s decision to pull the plug on its branches during the bull run due to low trading volume stands as substantial proof of the aforementioned statement. As the world was recovering from the pandemic, South Koreans seem to be highly affected by the virus right now.

South Korean Exchange Coinbit Execs Find Themselves Behind Bars Following Market Manipulation Allegations

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Market manipulation has become a common phrase in the world of crypto. South Koreans are the latest to be affected by the massacres of market manipulation. The South Korean authorities, however, aren’t far behind as they took down a prominent exchange that engaged in market manipulation over the last year.

South Korean Authorities Shut Down Market Manipulating Crypto Exchange

The popularity of the crypto-verse has grown by a huge majority and the value of its market follows suit. Scammers and hackers across the globe view this as a major point of attraction and dive into the industry to pocket some easy money. Regulators and law enforcement have been working towards busting crime pertaining to the crypto-verse. A recent incident in South Korea is a clear example of the same.

A local news portal reported that the Seoul police had taken down, Coinbit, a cryptocurrency exchange that formulated a market manipulation scheme. The Chairman, Choi Moi along with two other executives of the exchange were nabbed by the police for dwelling into market manipulation over the course of several months. The news portal reported that the executives had bagged over 100 billion won by buying and selling the crypto asset around the same time. This action was called wash trading and about 99% of the crypto exchange’s activities were executed through wash trading.

The Coinbit officials had even set up a ghost account to meddle with the prices of the assets and accelerate the volume of the transactions. This took place from August 2019 all the way up to May 2020.

The South Korean police took this exchange down on 26 August 2020. The Coinbit had an office in Gangnam-gu where the police searched and sealed the place following the information about the scam that the execs of the exchange were running. The prosecutors of South Korea have reportedly been gearing up for a case against the men behind the Coinbit market manipulation.

South Korea Pushes Crypto Tax Rule To 2022

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As the value of the crypto industry has been going on an uphill journey, regulating these assets has become just as important. South Korea’s government seems to be taking the essential measures to do so. While the South Korean government revealed that it was all about regulating crypto, a recent delay on regulations pertaining to the digital assets was imposed.

South Korea To Enforce Crypto Tax Rule In January of 2022

While the crypto industry upholds privacy and anonymity, several seemed to have taken advantage of it and even went on to engage in tax evasion. Keeping this in mind, the South Korean government decided to spruce things up a bit. Back in June, the South Korean authorities part of the Ministry of Economy and Finance put forth the idea of taxing the profits garnered via crypto assets. This further received a thumbs up in July and a 20% tax on crypto profits was to be implemented by October 2021.

However, as per a recent report by a local South Korean news agency, the 20% tax on crypto gains was shifted to January 2022. In a recent meeting preceded by the South Korean National Assembly, the government decided to give the 20% tax on gains acquired via crypto trading a green signal. South Koreans that engage in crypto trading activities that go beyond $2,000 would reportedly be taxed by 20%. In a recent amendment proposed last week, a delay was urged to the law that was coming into force in October 2021. The local crypto platforms reportedly suggested that they lacked the time to formulate a precise tax reporting foundation.

The South Korean government seemed to have approved this request and pushed the crypto tax rule to 1 January 2022 from October 2021. This is said to give the local crypto platforms a three-month window to put into place a credible tax reporting base.

South Korea has been time and again proving that it was more than just its pop culture. The country has been sifting through the crypto-verse and seems to have garnered an increased adoption across the region.

Pandemic Forces Bithumb To Pull The Plug On Few Of Its Offices

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The pandemic had caused abject disruption around the world. The coronavirus put the entire world in shackles. While the economy staggered and several lost their jobs, COVID-19 was taking over the world. Several prominent platforms pulled the plug to depreciate the spread of the virus, a prominent cryptocurrency exchange seemed to be aiding this move and has planned to put a hold on its services.

Pandemic Staggers Growth Of Several Platforms

A small yet deadly virus caused the death of many across the globe. While mankind remained indoors, the streets of the earth were ghosted. Several markets went on to record major slumps and have been trying to recover from their losses. The crypto-verse, however, seems to have picked up its recovery phase as it has been reaching new highs. Even though the recovery rate of COVID-19 has surged, the cases seemed to have decreased. Yet, certain platforms continue to go the extra mile to remain unfettered by the pandemic. South Korea’s Bithumb is the latest crypto platform to do so.

South Korea has been known for its impeccable pop culture. With South Korean movies, shows as well as music taking over the world, the country has been working on exercising soft power through the same. The country’s interest in crypto is also highly touted. In light of the ongoing pandemic, Bithumb revealed that it would shut down a few of its offices.

In a blog post, Bithumb wrote that it would be momentarily suspending its Gangnam center that acted as an offline support platform to its users. The blog post read,

“As the number of domestic confirmed cases of Coronavirus Infectious Disease-19 (hereinafter referred to as Corona 19) has increased and social distancing in the metropolitan area has been upgraded to stage 2, we intend to temporarily suspend the operation of Bithumb offline Gangnam Center to prevent the spread of Corona 19.”

The platform mentioned that it would suspend its service from 24 November 2020 until further notice. A safer and convenient option in replacement of the offline platform would soon be rolled out.

While several countries have been easing the laws that were put in place during the peak of the virus, South Korea seems to be prolonging the same. As per worldometer, a covid-19 tracking website, the total number of cases were at 31,353 with over 510 deaths. The number of recovered individuals stood at 26,722. Additionally, the daily new cases in the country were seen increasing significantly.

Pandemic

South Korea Forbids Exchanges To Facilitate Trade Of Privacy Coins

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South Korea has been engulfing the entire globe through its cultural soft power. BTS and Korean drama has never been so popular. Along with this cultural takeover of the globe, the country is spearheading the adoption of crypto. South Korea recently legalized crypto in the country by passing a bill to regulate digital assets. However, the latest news from the Asian country suggested a ban on privacy coins.

South Korea To Dodge Abject Money Laundering Risk

Just a year ago, privacy coins had become a big no go for certain regulators. The Financial Action Task Force’s [FATF] Travel Rule was a huge setback for privacy coins like Monero [XMR], Zcash [ZEC] as well as Dash [DASH]. South Korea seems to be on board with this rule as the country decided to put a ban on privacy coins.

As per a recent announcement, the South Korean Financial Services Commission [FSC] revealed on its website that it was going to restrain digital asset providers from engaging with cryptocurrencies that pose a great risk of money laundering. This rule comes as part of the country’s Special Payment Act. Certain rules were put into place by South Korea earlier this year, however, these rules will only be effective since March 2021.

This isn’t the first time privacy coins have been banned in a country over money laundering issues. Japan also laid a ban on these assets. The South Korean regulator also went on to label privacy coins as “dark coin”. Since the information pertaining to the transaction of privacy coins is kept “private” the government would find it difficult to track down or trace the transaction of crypto assets.

While several exchanges have taken a step ahead and delisted privacy coins, the FSC suggested that anti-money laundering as well as ‘Know Your Customer’ policies should be mandated in every crypto platform operating in the country.

China Takes A Leap In Development Of CBDC; Shenzhen Rolls Out 10M Digital Yuan Public Giveaway Program

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China’s interest in the development of the Central Bank Digital Currency [CBDC] is witnessed through the progress the country is making in the same. Fearing China’s global take over with regard to financial technology, other countries have stepped up their game and have been probing the prospects of CBDC. However, the latest news from China suggests that the digital yuan would soon be out and about.

Public Giveaway To Endorse The Digital Yuan

Not long ago, China revealed that its CBDC the digital yuan was out for testing in various sectors. The Shenzhen city of China seems to be taking things up a notch by rolling out a pilot program that includes the distribution of the digital yuan. A news portal revealed that the Chinese city had joined forces with the central bank of China in order to organize a public giveaway.

Funded by the Luohu District of Shenzhen, a total of 10 million digital yuan which is worth about  $1.5 million will reportedly be distributed among the residents of the city. The giveaway will include a total of 50,000 individuals and the aforementioned amount would be allocated via a lottery. The intention behind carrying out such a task is to allow the citizens to spend the digital yuan, which is part of the testing program.

An online platform was set up for the giveaway where individuals could register and apply to be a part of the program. The giveaway was scheduled for 9 October 2020 and the winners could commence putting their digital yuan to use from 12 October to 18 October. While the spending of the acquired digital yuan is limited to the Luohu area, about 3,389 shops are reportedly willing to accept the digital RMB.

If the winners of the giveaway restrain from spending the received amount post 16 October, the bank would reportedly take it back.

As China makes headway in the development of its CBDC, other countries are still in the probing stage. Japan recently revealed that it was not looking to launch a CBDC any time soon and would engage in intensive research about the same. South Korea, however, has been trying to catch up with China. The country seeking the attention of the world through its pop culture has also begun the distribution stage of the digital won.