Yesterday (1), the CEO of Hashed, the largest crypto investment firm in South Korea, pointed out that with the extension of crypto taxation in South Korea for another two years, the institutionalization process of the crypto and Web3 sectors in the country is expected to accelerate.
Kim listed several expected policy advancements, including allowing companies to open crypto accounts, opening up institutional investors' participation in crypto investments, allowing token issuance in South Korea, and releasing an STO/RWA regulatory framework.
Other important policy directions also include developing stablecoin-related guidelines, establishing virtual asset accounting standards, subdividing custody and other professional fields, recognizing crypto companies as venture capital companies (currently considered as gambling businesses), allowing South Korean exchanges to access overseas users, and relaxing investment restrictions for South Korean companies in overseas blockchain companies.
With crypto taxation in Korea delayed for two more years, I expect the long-delayed crypto/web3 institutionalization in the country to pick up steam soon. Here's my initial list;
– Allowing corporate accounts to be opened for crypto
– Allow Korean institutional investors to…— Simon Kim (@simonkim_nft) December 1, 2024
Netizens' Heated Discussion: Progress and Challenges Coexist
Netizens reacted enthusiastically to this. Many expressed support for the government's responsiveness to the needs of the public and businesses, seeing it as an important progress in the crypto sector. Many netizens believe that these reforms are good news for both retail and institutional investors, indicating that the regulatory framework is moving in a direction that promotes market growth.
However, some pointed out that although the regulatory framework is changing, this does not mean that the regulation of crypto will be relaxed, and the specific implementation effects still need to be observed. Some netizens are highly anticipating that if the South Korean government can allow foreign accounts to use the Korean won bank for crypto transactions, this will greatly promote market liquidity.
Crypto Capital Gains Tax
South Korea's plan to levy a 20% capital gains tax on crypto earnings, originally scheduled to take effect on January 1, 2022, was postponed to January 1, 2025 due to strong opposition from crypto investors and industry experts. The Democratic Party, the largest party in the South Korean National Assembly, announced a change in position today (2), deciding to further postpone this plan to 2027, agreeing to a two-year additional delay.
