South Korean Crypto Taxes Delayed Again

South Korean crypto taxes have been delayed until 2021 and may continue. The ruling party may delay crypto taxes until January 2028. The impracticality of the current tax policy due to system and institutional failure influences this decision.

A local news publication reported that the South Korean government seeks an additional three-year delay from January 2025 to January 2028.

This move could provide significant tax relief to South Korean crypto investors, who have criticized crypto taxes.

Public Sentiment and Political Pressure

Crypto taxation discussions in South Korea began in 2021 and have seen several postponements due to political and public pressures. Since then, public sentiment has been vital in the ongoing delays.

The current administration, under President Yoon, seems responsive to the growing dissatisfaction among investors. Delays in implementing the financial investment income tax add to the situation's complexity.

The Financial Services Commission (FSC) noted a surge in crypto investors, with the total number reaching 6.45 million in May 2024. However, with the recent decline in Bitcoin prices and overall market correction, many oppose the imminent tax, fearing it would drive investors away.

Market Impact and Investor Concerns

The nation has a significant cryptocurrency market. According to the country's Financial Services Commission (FSC), 6.5 million people (12.5% of the population) have used crypto in South Korea. According to Kaiko statistics, South Korea's official won currency outperformed the U.S. dollar in crypto trading in the first quarter of 2024.

Hence, South Korean crypto investors could enjoy three more years of tax-free gains if the proposed delay is approved.

If rejected, this will impact the Korean economy as investors threaten to leave the market. This period might give the government the necessary time to develop a more practical and investor-friendly tax system, potentially stabilizing the market and encouraging continued investment.

Government and Opposition Stance

Conversely, some opposition leaders blame the government for inadequate preparation and for relying on public opinion to shape tax policies.

Despite these criticisms, the current administration's decision to delay it to 2028 means that they want the crypto tax to address market concerns and provide a more stable environment for crypto investors in the country.