South Korea has been attempting to put regulations associated with the exchanges of cryptocurrencies in domestic markets which includes example such as Bithumb, CoinOne and Korbit since the end of November of 2017. In order to control the aggressive trend of wild cryptocurrency speculation in the country, the governing body of the nation is trying to put rules and regulations which would prevent minors from being associated with transactions of cryptocurrencies by imposing a ban and they are inspecting for ways to impose tax on the returns they would receive from their initial investments.
According to recent studies, it has been concluded that South Korea is one of the major markets for the exchange and trade of virtual currencies along with leaders such as Japan and U.S. Also, it is known as the largest manufacturer of ether and they account for 33% of the international market. In addition, the economy has been claimed to be a host for two of the leading virtual currency exchanges, Bithumb and CoinOne while also being rumoured to have approximately one million registered regular traders in cryptocurrencies. The ratio states that every one citizen among 50 citizens is likely to be associated with the trading of virtual currencies.
This has been a case of concern for the authorities of South Korea. The nation’s Financial Services Commissions put a ban on initial Coin Offerings in the month of September 2017. In the month of November 2017, the head of the Financial Supervisory Services of South Korea stated that they were monitoring the transactions of virtual currencies within the boundaries of the economy. Also, the national tax agency has brought the fact to light that they have looked for a scope to impose a value-added tax, tax on capital gains or put them simultaneously on the trading of cryptocurrencies. Implementation of such regulations will allow South Korea to be put on the list of the very few countries who have been successful in taxing exchanges of cryptocurrencies into cash.
The government of South Korea has decided to take such measures surrounding the trading of virtual currencies due to the threat of cyber attacks from their not so friendly neighbour, North Korea. According to the country’s National Police Agency, they have expressed their concern over bitcoin exchanges as North Korean hackers could be targeting the cryptocurrency exchanges in the economy of South Korea.