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South Korea is once again considering pushing back the implementation of its cryptocurrency gains tax, a move that would provide relief to the nation’s crypto investors who have been vocal in their opposition to the levy.
The first delay pushed the implementation date to January 1, 2025, giving investors and businesses more time to prepare for the new tax regime. However, ongoing market volatility and concerns about the potential negative impact on the crypto ecosystem have prompted calls for further postponement.
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Now, the right-wing People Power Party, to which President Yoon Suk-yeol belongs, has proposed a delay until 2028. The party argues that the current bearish market conditions, coupled with the inherently risky nature of crypto investments, make the imposition of a tax untimely and detrimental to investor sentiment.
The bill, currently under consideration by the National Assembly, suggests that a significant portion of crypto investors may exit the market if the tax is implemented as planned.
South Korea boasts one of the world’s most vibrant crypto ecosystems, with a substantial portion of its population engaged in crypto trading. The Korean won has even surpassed the U.S. dollar as the most widely used fiat currency for crypto transactions in the first quarter of this year.
The South Korean government initially introduced the crypto gains tax as part of its efforts to broaden the tax base and increase revenue. However, critics argue that the tax could stifle innovation and drive crypto-related businesses and investors to other jurisdictions with more favorable regulatory environments.
While the Ministry of Economy and Finance has yet to officially announce a decision on the proposed delay, it is expected to unveil new tax code amendments later this month. The outcome of these deliberations will have a significant impact on the country’s crypto industry and investor confidence.
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