The situation regarding cryptocurrency in South Korea continues to develop, as the country’s latest tax law faces heavy opposition from various crypto proponents. The new Prime Minister Nominee Kim Boo-kyum, who had been nominated by Moon Jae-in, the country’s current President, has stated that his team shall be investigating this new crypto tax law.
As the use of cryptocurrencies and blockchain technologies become increasingly mainstream, numerous countries have dealt with it in varying ways. Whereas some have embraced it with open arms, others remain hesitant. Then there are some who refuse to want to do anything with it, as they feel that by adopting this experimental new method of decentralized finance (DeFi), the pre-existing traditional financial systems might be threatened and eventually replaced, as is the case with India for instance.
Kim Boo-kyum wants to make sure no one is a victim of the new crypto tax law
As per a report provided by KBS World, the new PM Nominee wants to ensure that the new crypto tax law does not result in creating any unnecessary victims. The law is set to be put into effect towards the beginning of next year, most likely in January 2022.
The comments by Kim were based around the steadily growing opposition that has all but becomes commonplace in South Korea. This opposition is regarding the cryptocurrency tax regime, and it had only increased when the country’s Financial Services Commission Chairman, Eun Sung-soo, had claimed that cryptocurrencies lack any kind of intrinsic or quintessential value.
Eun had made the comments during his appearance for the National Policy Committee, which had taken place earlier on in the month. He essentially stated that there is no need for increased subtle cryptocurrency regulations, as by adding such regulations, the government will only encourage citizens to act on their own anyway (due to the ever-increasing popularity of cryptocurrency in a global sense).
Still, a long way to go for crypto in South Korea
Naturally, Eun’s comments had angered many in the crypto community. However, he was not the only one that the rage had been directed against. The Bank of Korea’s governor, Lee Ju-yeol, had claimed that cryptocurrencies perform ‘abnormally’ and also that they have no place in the world of digital payments.
Matters were worsened when the country had also announced that regulators should be cracking down on any and all crypto transactions that may be deemed illegal, thus resulting in stricter control and compliance measures.
Furthermore, as per the FSC’s decision in March 2021, cryptocurrencies are to be included in the financial reporting rules, and so the existing cryptocurrency businesses and exchanges in South Korea have only till September later this year to comply with the reporting, and regulatory standards or the executives could face jail time. Things escalated even further when the nation’s tax authority had seized nearly $22 million from those trying to avoid paying taxes through cryptocurrencies.