According to The Korea Times, finance minister nominee, Hong Nam-Ki disclosed the South Korean government’s plan to tax cryptocurrency and initial coin offerings (ICO). Nam-Ki responded to a question based on taxation of digital asset, in front of the South Korean National Assembly.
Further, the nominee specified that the tax method for virtual currencies would be finalized in accordance with taxation infrastructure and progress by global stakeholders.
In addition, he said,“A task force consisting of experts from relevant government agencies including the National Tax Service and the private sector will be formed to examine overseas examples and hammer out the taxation plan.”
According to Nam-Ki, considering the ICO ban in South Korea, the government intends to reach a definitive conclusion regarding ICOs once important factors such as market conditions, investor protection issues, and global trends are studied. The government’s intention related to ICO would depend on the results from the survey carried out by the financial regulatory market and experts.
Speaking on digital currencies, the nominee described them as a phenomenon having no conventional regulatory structure. He remains positive about the government’s actions related to blockchain technology, saying that 90% of business technology fall under blockchain-related businesses, classifying them as venture companies.
The South Korean market has been witnessing a high inflow of Chinese virtual currencies, major virtual currency exchanges like Binance, Huobi, and OkEx encroaching the Korean space.
OkEx and Huobi have geared up to initiate their plans, and Binance is also in action to expand within the South Korean market. However, the local crypto exchanges have been rendered powerless.
The Korean government has failed to be thorough regarding the regulatory framework for the cryptocurrency industry. The incessant inrush of Chinese exchanges has been a cause of concern among the Korean cryptocurrency exchange. It is challenging for Domestic crypto companies to expand abroad due to money laundering concerns. The Korean Bar Association has requested the government to create laws that would help in the development of the domestic crypto industry and the protection of investors.