The Ministry of Strategy and Finance has indicated that it is considering imposing a tax on income from crypto transactions and is planning to announce a taxation framework in 2022.
The Korean government decided crypto is legal as long as the people pay their taxes for dealing with. As for the time these words are being written it has been estimated that there are individuals who owe more than 12 million USD. From the Korean point of view cryptocurrencies are neither legal tender nor financial assets, and therefore taxing those is a bit of a difficulty they have encountered. Cryptocurrency exchange regulations in South Korea are strict and involve government registration and other measures overseen by the South Korean Financial Supervisory Service (FSS). Furthermore, lately the Financial Services Commission decided that all cryptocurrency exchanges would be required to register with the government and report transactions as requested.
On the user side, it’s easier to trade and even profit from crypto in Korea, but on the other side, the provider’s, it’s a regulatory mess which could make you stop operating at any given time.
As of now, non-fungible tokens (NFTs) are not included under the tax. From 2022 there will be new regulations considering cryptocurrencies. Under the new regulations, South Korea will tax personal crypto income 20% if the total income is more than 2.5 million Won or $2,100.
P2P, credit cards and even bank transfers are permitted as long as the VASP is approved by the Korean Government.
Virtual Asset Service Providers (VASPs) have an obligation to keep records of customers whose Virtua Asset transactions are over the amount 1 million KRW (roughly 830 USD). Furthermore, VASPs must report any suspicious transactions to the KoFIU (Korean Financial Intelligence Unit).