Crypto Frontline

The South Korea National Assembly had recently decided to amend the new tax laws and that is good news for people and companies working with cryptocurrencies, given the proposed income tax for crypto transactions will no longer enter into effect starting from January 2021.

Although for the past several months we’ve seen regulated such as the FCA or FinCEN in the USA, tightening AML rules for crypto companies, there is little commitment to reinforce crypto taxation right now, given the global economy is facing a severe downturn and the government doesn’t have to put any pressure on the recovery.

South Korea crypto tax amended

On December 1^st, the Planning and Finance Committee of the National Assembly in South Korea passed amendments to the tax laws and because of that, the new tax plan will begin to be implemented, starting from January 2022, according to the local media.

The crypto business community had long been lobbying for a delay of the new tax rules until 2023, but now that they have another year to adjust for the rules, it is still something worth considering.

Rising crypto valuations – people should pay taxes?

Same as it did in 2017, the cryptocurrency market is marching higher impulsively and the large-cap tokens are doing the heavy lifting. Bitcoin had briefly touched a new all-time high at the beginning of this week, showing there is still buying interest even at these elevated levels.

Ether had managed to reach $630 on December 1^st, exceeding the November 24^th high before starting a corrective move that continues to unfold. Litecoin, XRP, Monero, or Stellar, had all been posting impressive gains for the past few weeks and it should be no surprise that there are chatter and debate about crypto taxation.

There are still many countries that don’t have crypto tax rules, but things could change fast in case the cryptocurrency market rally will continue well into 2021. We’ve talked about the correlation between increased crypto valuations and regulatory scrutiny, so it should be expected to see more new measures adopted next year.

South Korea had shown understanding for the business community by delaying the new tax plan that would have influenced various sectors, not just crypto. Our opinion on crypto taxation remains the same and we believe that crypto transactions should be treated the same as stocks, FX, commodities, or ETFs trading, given speculation is the main reason why people are buying cryptocurrencies.