Cryptocurrency adoption has been on the rise in recent weeks and the countries of South Asia have been at the forefront. Reports have shown that developments in Asia have surpassed that in the US, with proponents betting on China and South Korea.
South Korea’s recently reported that it had taken significant steps to integrate cryptocurrencies into its economic systems after providing amendments to its economic framework.
The country claimed that it would step up efforts for cryptocurrency taxation after the National Assembly passed a new revision. The amendment will be made to the Reporting and Using Specific Financial Transaction Information Act, with the aim of putting the cryptocurrency industry under government regulation.
Cryptocurrency companies will now be asked to take anti-money laundering measures and conduct their business on the basis of real-name accounts.
South Korea has stated that any exchange that does not comply with the stipulated rules will be banned from operating in that country If the registration is not carried out, the State has the right to sentence owners to up to five years in prison
Apart from jail time, cryptocurrency exchange heads may also be asked to pay 50 million Won or $42,000. One of the other main agendas of the new revised law is to establish a solid playing ground for cryptocurrency taxation.
All details about the cryptocurrency taxation laws will be released in July. At the same time, the Korea Blockchain Association would survey market participants and deliver their findings to the tax authorities.
The government has also asked the officials heading the cryptocurrency companies to function on real-name accounts. Korea is one of the few countries that has seriously considered cryptocurrency as a legitimate form of transaction and the tax plan is seen as a first measure.
The country’s move towards cryptocurrency taxation stemmed from the Bithumb issue back in December 2019. Last year, the National Tax Service incited a massive controversy by filing an 80 billion won tax on Bithumb.
This led to multiple proponents of the cryptocurrency industry to believe that they were being treated unfairly. Bithumb had retaliated to the ban by stating that there were no legal provisions for crypto to be taxed in the country.
A member of the Korea Blockchain Association said that they will be holding a series of debates on cryptocurrency soon and that there will be input from multiple sectors of the decentralized industry. At the moment, there were only four exchanges that adhered to the rules proposed by the Blockchain Association. They were Upbit, Bithumb, Coinone, and Korbit.