Crypto industry in South Korea takes a beating: government doubles taxes

01 Oct, 2018
by Jelmer van der Dussen
News
Crypto industry in South Korea takes a beating: government doubles taxes

Cryptocurrency exchanges will be excluded from venture firm certification in South Korea, the government has decided. This means exchanges cannot benefit any longer from a 75 perfect cut in acqusition tax, according to a report of Business Korea on Monday.

The exclusion of crypto exchanges from venture firm certification means that the corporate and income taxes of the exchanges will be doubled. Privilages in securing funding and credit gaurantees will disappear as well.

The decision by the South Korean government has a major impact for the cryptocurrency and blockchain industry. A source tells Business Korea that 'this measure implies that the government is regarding not only cryptocurrency exchanges but also every blockchain-related venture firm and business as gambling'. There are serious concerns the development of blockchain technology will be hampered by this measure.

With the new policy, new exchanges cannot be certified as venture firms anymore. Existing exchanges such as Bithumb and Upbit will not be able to certify as venture firms when their current certification expires. Most certifications will expire by the end of the year.

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