South Korean cryptocurrency peer-to-peer trading is at an all-time high, despite policymakers’ ambiguous statements on regulation.
According to LocalBitcoins, approximately 353 million Korean Won were exchanged in the first week of this month. This represents a huge increase over previous weekly quantities.
Adopting a crypto tax
The rise in interest in peer-to-peer trading coincides with regulators’ efforts to put in place a regulatory framework.
South Korea, already one of the most progressive governments in terms of cryptocurrency market regulation, is stepping up its efforts to combat illegal behavior.
The increasing P2P volume could be due to investors looking to get the most out of their money as regulators clampdown. Per the recent reports, investors are confused as a result of the lack of clarity regarding legislation.
The adoption of crypto taxes is one of the most pressing challenges. Officials in South Korea announced that the asset class would be taxed at a rate of 20%.
However, recent reports have suggested that this taxation plan may be changed or repealed entirely. The tax reform will take effect in 2022, though it is unclear how it will be implemented.
The Financial Services Commission (FSC) announced in early November that the unique asset would not be subject to taxation, which has added to the confusion.
Given the lack of resolution thus far, it is unclear what the regulatory landscape in South Korea will look like.
The South Korean opposition party criticized the taxing policy and demanded that it be postponed until 2023 in exchange for a more liberal tax plan.
The first regulatory compliance certifications will be delivered to exchanges in 2021, making them one of the primary parts of the industry under examination. Several exchanges have been forced to close as a result of regulatory scrutiny.
As of now, the intricacies of cryptocurrency regulation are unknown. However, it’s almost clear that a framework will be put in place, though whether it is harsher than investors prefer remains to be seen.
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