South Korea is going into a new chapter for its crypto industry, with stringent new standards set to go into effect from March 25 that will require all digital currency organizations to conform to new crypto reporting guidelines and registration rules.
As an article from the Korea Herald indicates, industry specialists dread the possible effects of the new measures — in particular, the incoming Specific Financial Transactions Act. An act that may have harming ramifications for most homegrown digital currency firms. The act requires all virtual resource operators to seek official registration,for which they should show proof that they are working utilizing genuine name accounts at South Korean banks.
While this is planned to forestall monetary wrongdoings, such as, illegal tax avoidance, the vast majority of smaller-scale crypto firms have reportedly thus far been unable to forge partnerships with local financial insititutions Koo Tae-age, a layer specializing in tech firms, told the Herald:
“Since the promulgation of the law a year ago until now, so many crypto exchanges have tried to abide by the new law by getting real-name accounts from the local banks, but it didn‘t work. Even those that are equipped with an information security management system and have CEOs with no criminal records were not able to forge a partnership with banks.”
Koo added that the new law, which neglects to separate between crypto firms of various sorts and sizes, risks pushing smaller firms “into a corner” and creating a market in which just the bigger players can operate.
Kim Hyoung-joong, chair of the Korea Society of Fintech Blockchain and a teacher at Korea University, has echoed other specialists’ concerns and asked Korean monetary specialists to draft new rules that will consider the way that banks are disinclined to give real-name records to a significant number of these organizations.
South Korea will likely carry out another crypto tax rule early next year. because of impact in January 2022. The law will see capital gains taxes imposed on all crypto trading profits in excess of $2300.
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