Crypto traders in South Korea get tax break

Traders who said they were unfairly targeted will likely get a reprieve from a tax on crypto profits in South Korea.

Crypto traders in South Korea get tax break

Traders who said they were unfairly targeted will likely get a reprieve from a tax on crypto profits in South Korea.

According to a Bloomberg report from Tuesday, the Finance Committee of the National Assembly voted to tax crypto profits of more than 2.5 million won ($2,105) until 2023 at a rate of 20%. On Thursday, the full-body will vote on the proposal.

Some have questioned why crypto assets such as Bitcoin and Ether were being treated differently from stocks that would have faced a similar capital gains tax.

It was intended that the crypto levy would be introduced in 2017 as a means of taming the crypto frenzy.

Excessive speculation, money laundering, and tax fraud are among the concerns raised. The government stepped up its regulations, including banning ICOs and closing smaller crypto exchanges.

As a result, countries around the world are revising their tax laws specifically to deal with cryptocurrencies, a class of assets whose market value had blown up to over $3 trillion before reversing.

Crypto gains will be taxed at 27.5% starting in March, the same as other assets.

The United States has already taxed crypto at the same rate as other capital gains, although new reporting requirements have been implemented to make sure tax is paid.

In Korea, however, cryptos will be taxed at different levels and rates than local securities.

There will be a 20% to 25% tax on most profits made from stock trading, but the first 50 million won each year will be exempt.

In the original plan, crypto gains would be taxed in 2022, while other capital gains would not be taxed until 2023, which caused some traders to rethink their strategies.