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How Crypto Traders Help Increase State Tax Revenue in South Korea

Bithumb

Exchange

South Korea Tax Upbit

Author

Priyeshu Garg

Author

Priyeshu Garg

Author Profile

Last updated:

June 25, 2023

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Now that figures are available for 2017, it appears South Korea’s moderate regulatory stance on cryptocurrencies is paying dividends, at least to government. Some 30 of the country’s cryptocurrency exchanges generated a combined USD 648 million in taxable revenue in 2017, Yonhap News Agency reported, citing politician Park Kwang-on.

The Upbit exchange appears first in line to lose a chunk of revenue, as it boasted a 52.9% market share, with Bithumb and Coinone ranking second and third respectively during 2017. Korbit was fourth, and is also facing a hefty tax bill.

The released figures are a spur to both private sector approval and governmental appraisal of digital currencies in South Korea.

The most impressive statistic is that, in 2017, revenues of South Korean virtual exchanges grew almost 90 times compared with 2016, when revenues were what now seem a paltry USD 7.5 million.

Although January saw a costly ruling for exchanges operating in South Korea, with regulators deciding that exchanges would be liable for both corporate and local income tax, the financial figures are being seen as broadly positive for the future of cryptocurrencies in South Korea. Meanwhile, the total tax bill for digital exchanges amounts to around 24%, payable this spring for corporate and local tax combined, according to a separate report by Yonhap.

South Koreans are among the most enthusiastic nationalities for cryptocurrencies. The South Korean government’s currently staid approach is seen as a relief to many investors, with the current climate boding well for those with ambitions for South Korea to become a south-east Asian hub. The apparent acceptance by government of cryptocurrency exchanges as just another tax-paying business sector demonstrates a wish to integrate cryptocurrencies fully into the existing regulatory framework.

Singapore and other neighbors are among other nations who have adopted a cautious, yet relaxed, approach to virtual currencies. All of the countries displaying a positive attitude towards crypto exchanges seem to have a detailed understanding of the value of blockchain technology, with a hesitance to stymie the use of the blockchain with over-regulation with regard to cryptocurrencies.