- Financial authorities in South Korea aim to pass legislation to protect crypto investors.
- A 10% tax would be levied on any transaction involving digital assets under the proposal.
- 5.6 million South Koreans are active in the nation’s digital asset market.
Financial regulators and lawmakers in South Korea aim to approve an early bill that focuses on safeguarding investors in digital assets and tackling unfair trading practices.
These regulators strive to implement the bill before adopting the “Digital Asset Basic Act,” which is still being prepared.
The proposal is not a surprise because Yoon Suk-Yeol, the president of South Korea, mentioned the necessity for new regulations when he ran for office in January. The necessity of regulations to manage risks in the trade of digital assets is also supported by the Financial Services Commission (FSC), the nation’s financial authority.
The proposed measure would require digital asset exchanges to register with the Financial Services Commission and abide by several regulations, including anti-money laundering and counter-terrorism financing requirements.
The measure would also impose a 20 percent tax on digital asset transactions from 2025 and create a government fund to support digital asset investors who experience financial losses.
The law will enable South Korean authorities to monitor the cryptocurrency market to the same level as the stock market, even though specifics of the planned legislation have not yet been made public.
The National Assembly of South Korea is now considering 14 proposals that touch on various facets of the cryptocurrency industry, including token listing and industry development.
South Korea’s government informed local media that it would consider crypto rules from the United States and other nations while developing its legislation, notably highlighting reports from multiple executive branches in the United States in October after the U.S. decree on digital assets issued by President Joe Biden.
According to the Korea Financial Intelligence Unit, 5.6 million of South Korea’s 51 million inhabitants are thought to be involved in the country’s digital asset market, worth more than 55 trillion Korean won (US$42 billion) in 2021.
According to the FSC, South Korea has 6.9 million cryptocurrency users with an average daily trading volume of $3.7 billion.
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