South Korea’s ruling party, the People’s Power Party, has put forward a proposal to postpone the introduction of taxes on cryptocurrency trading profits until 2028. The party cited negative sentiment towards virtual assets as the reason behind the postponement.
The proposal, submitted on 12 July 2024, argues against rushing into taxing cryptocurrencies amidst their perceived higher risks compared to traditional stocks. The country fears potential market exodus additional financial burdens are imposed.
The crypto gains tax plan was originally slated to commence on January 1, 2025. However, it would now be deferred under the party’s plan, aligning with campaign promises made prior to the April general elections.
Previously, the party vowed to delay the tax by two years, emphasizing the need for a comprehensive regulatory framework before introducing taxation measures on digital assets.
South Korea Notes Absence of Oversight Mechanism
In the delay proposal, the People’s Power Party noted the absence of a centralized oversight mechanism akin to traditional stock exchanges. It said that a two-year period is essential to establish such a system effectively.
South Korea’s regulatory stance on crypto taxation has evolved significantly since its initial scheduling in 2021, with successive postponements driven by strategic considerations for investor interests and market dynamics.
The current threshold for capital gains tax on crypto stands at 20% for annual profits exceeding 2.5 million won (approximately $1,800), significantly lower than the thresholds applied to stock gains.
The decision to delay taxation until 2028, if approved, would mark a seven-year extension from the tax’s original timeline.
🚨 South Korea pushed back the 20% Tax proposal on Crypto gains till 2028.
Koreans will take full advantage of this bullrun. pic.twitter.com/u2ZCBYFPwN
— Zia ul Haque (@ImZiaulHaque) July 15, 2024
It is worth noting that prior to the 2024 election, South Korea’s rival political parties started vying for support from crypto investors, who have emerged as a key voting group.
Both the conservative People Power Party (PPP), aligned with the Yoon Suk Yeol administration and the rival Democratic Party (DP) presented their policy proposals to institutionalize crypto-assets, albeit with differing approaches.
Explore: Top 3 Ways to Buy Bitcoin with Apple Pay Instantly in 2024
South Korea Could See Mass Delisting
South Korea has introduced new crypto user protection laws. However, analysts have warned that these new regulations could lead to the delisting of numerous cryptocurrencies from local exchanges.
In a bid to address these concerns, South Korea’s Digital Asset Exchange Alliance (DAXA) has announced that they will conduct a comprehensive review of 1,333 cryptocurrencies over the next six months to minimize the likelihood of a sudden and extensive delisting event.
EXPLORE: 15 Best Crypto to Buy Now in 2024
The review process is a mandatory requirement for all South Korean exchanges, including prominent platforms like Bithumb and Upbit, as specified by the investor protection laws set to take effect on July 19.
DAXA outlined that the Protection of Virtual Asset Users Act will serve as the benchmark for assessing new token listings following the implementation of the regulations.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
99Bitcoins may receive advertising commissions for visits to a suggested operator through our affiliate links, at no added cost to you. All our recommendations follow a thorough review process.
Free Bitcoin Crash Course
- Enjoyed by over 100,000 students.
- One email a day, 7 days in a row.
- Short and educational, guaranteed!
Why you can trust 99Bitcoins
Established in 2013, 99Bitcoin’s team members have been crypto experts since Bitcoin’s Early days.
Weekly Research
100k+Monthly readers
Expert contributors
2000+Crypto Projects Reviewed
